MADRID: Zara-owner Inditex posted a rise in first-half profits thanks to a well-honed business model allowing the Spanish group to beat rivals in whisking new trends to the shop racks.
The world’s largest fashion retailer by turnover, owned by the publicity-shy Amancio Ortega who has become the world’s second richest man, said higher clothes sales and a rise in new stores around the globe drove the eight-percent jump.
Profits rose to 1.3 billion euros ($1.4 billion) in the six months from Feb. 1 while sales were up 11 percent at 10.5 billion euros, said the company which operates eight store brands including Zara, upmarket label Massimo Dutti and teen chain Bershka.
CEO Pablo Isla said the main reason behind the sales jump was “the execution of our business model globally,” with the opening of more than 80 stores in the first half, including in the new markets of Aruba, Paraguay and Nicaragua.
While its competitors prioritize low production costs and outsource manufacturing to China, Inditex makes more than half of its clothes in factories in Spain, Portugal, North Africa, Turkey and Eastern Europe — relatively close to its main markets.
This business model allows it to get clothes to stores much faster than its rivals and avoid excess inventory.
Clothes made for Zara, for instance, can go from the design stage to store racks in a mere two weeks.
By comparison the process takes Inditex’s nearest rival H&M six months because it sources its collection further away in China.
While H&M regularly challenges it for the global number one spot, Inditex is currently the largest fashion retailer by sales, based on the two companies’ first-half results this year.
But Noel Byrne, a business strategy professor at the Madrid branch of Boston’s Suffolk University, warned that the Spanish group was bound to face tighter competition in the coming years as rival retailers adjust their own processes to match its quick delivery times.
“When you are making big profits it is one of the most dangerous times in business because the competition want a share of that, and they smell it and they inevitably come,” he said.
As Inditex continues its push outside of Europe and plans to ramp up activities in China, it will also need to adapt its business model for Asia by opening design and production centers in the continent, Byrne added.
International expansion is crucial for the growth of the group, faced with Europe’s slow economic recovery.
According to a study by the Barcelona-based EAE Business School, China, Russia and South Korea are the countries where clothes spending has increased the most since 2004.
Spain, meanwhile, only represents two percent of global clothes spending, and its share in Inditex’s turnover has gone from 45 to less than 20 percent in just a decade.
Despite the good results, shares in the group fell in mid-afternoon trading due to a mix of profit taking and concern over “growth prospects in the second half that are slightly lower than before,” said Manuel Pinto, an analyst at brokers XTB.
Zara owner Inditex profits rise as business model pays off
Zara owner Inditex profits rise as business model pays off
Using space science to protect Saudi Arabia’s environment
- Kingdom is harnessing satellite technology to forecast disasters, boost agriculture
RIYADH: Learning space science has delivered significant environmental benefits worldwide, helping many countries better understand and manage climate challenges.
Saudi Arabia is now taking steps not only to explore the galaxy but also to invest in future generations who can apply space science to pressing environmental issues at home.
Last November, the Space Academy, part of the Saudi Space Agency, launched a series of seminars designed to enhance knowledge and develop skills in space science and technology, with a particular focus on Earth observation.
Running for nearly a month, the program formed part of a broader strategy to nurture national talent, raise scientific awareness, and build data capabilities that support innovation and research across the Kingdom.
As efforts to strengthen the sector continue, important questions remain: How can space science translate into tangible environmental benefits? And how large is the global space economy?
In an interview with Arab News, Fahad Alhussain, co-founder of SeedFord, highlighted the scale of the opportunity and its environmental impact.
“To be frank, the slogan that we always use in space is that ‘saving the Earth from the space.’ It is all about this,” Alhusain told Arab News.
“You can recall a lot of related environmental issues like global warming, related to forests, related to the damage that happens to the environment. Without space, it would be almost impossible to see the magnitude of these damages.”
According to Alhussain, satellites have transformed how experts observe environmental changes on Earth, offering a comprehensive view that was previously impossible.
He said that “the transformation of technology allows even the non-optical ways of measuring, assessing, and discovering what is going on in the environment … you can even anticipate fire before it happens in the forest.”
“You can detect the ice-melt down, you can get huge amount of information and can see it through the weather maps…there is a huge section in the economy for the environment,” Alhussain commented.
A 2022 report by Ryan Brukardt, a senior partner at McKinsey & Company, published by McKinsey Quarterly, found that more than 160 satellites currently monitor Earth to assess the impacts of global warming and detect activities such as illegal logging.
Brukardt cited NASA as an example of how advanced satellite tools are used to track environmental changes, including shifts in ocean conditions, cloud cover, and precipitation patterns. He also noted that satellite data can help governments determine when immediate action is needed, particularly in response to wildfires.
FASTFACT
Did You Know?
- Satellites collect massive amounts of data, and AI is used to help interpret this information more efficiently and predict future outcomes.
- The global space economy surpassed $600 billion in 2024 and is projected to exceed $1 trillion by 2030.
- Saudi Arabia has established three key entities: the Supreme Space Council, the Saudi Space Agency, and the Communications, Space, and Technology Commission.
Beyond disaster response, satellites offer vital insights for agriculture. According to Brukardt’s report, scientists can use space-based data to monitor crop development and anticipate threats to harvests, such as drought or insect infestations.
These wide-ranging applications explain the rapid growth of the global space economy.
According to World Economic Forum research, the sector is projected to reach $1.8 trillion by 2035, nearly tripling from $630 billion in 2023.
For Saudi Arabia, expanding space science capabilities could help address the country’s arid conditions by monitoring desertification and identifying sources of air pollution. Early detection of droughts, heatwaves, and crop stress could support more effective environmental planning and response.
Space-based data could also play a critical role in tracking environmental changes in the Red Sea and surrounding coastal ecosystems, strengthening marine conservation efforts and supporting the Sustainable Development Agenda.
As Alhussain emphasized, advancing knowledge in space science and satellite technology enables experts to measure environmental damage accurately and predict disasters before they occur, allowing for more effective responses.
By investing in space science education and research, the Kingdom can build national expertise, strengthen environmental protection policies, enhance food and water security, and contribute to global efforts to combat climate change—while also benefiting from the rapidly expanding space economy.
Ultimately, a deeper understanding of space and its applications offers Saudi Arabia, and the world, better tools to anticipate climate challenges, protect ecosystems, and safeguard biodiversity.
“By collecting data and using satellites, you can better analyze and measure so many things that help the environment,” said Alhussain.
“There will be patterns where you can warn people, scientists and decision makers to do something about it.”
