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MADRID - Spain's Inditex, Europe's biggest clothing retailer, posted Wednesday a rise in fourth-quarter net profit as strong sales abroad, especially in Asia, offset sluggish domestic demand.
In the three months to December, the owner of the Zara, Bershka and Massimo Dutti chains earned a net profit of 483 million euros (666 million dollars), against 410 million euros in the same year-ago period, it said in a statement.
For the full year 2009 the company's net profit rose to 1.31 billion euros from 1.25 billion euros in the previous year. Analysts polled by Dow Jones Newswires had expected a full year 2009 net profit of 1.27 billion euros.
Net sales during the fourth-quarter rose to 1.9 billion euros from 1.68 billion euros during the same year-ago period and reached 11.08 billion euros for the full year compared to 10.41 billion euros last year.
Sales in Spain, which is being wracked by its worst recession in over 80 years that has driven the jobless rate to nearly 19 percent, accounted for 31.8 percent of total sales, compared with 33.9 percent in 2008.
Sales outside Spain accounted for 68.2 percent of total sales, up from 66 percent in 2008.
"A highlight was the significant increase in sales in Asia, which in 2009 accounted for 12.2 percent of total sales versus 10.5 percent a year earlier," the company said in a statement.
Inditex continued its strategic push into Asia's three top markets last year with the opening of 10 new stores in Japan, 12 new stores in South Korea and 41 new outlets in China, including the first Massimo Dutti store in Beijing.
The company plans to add between 365 and 425 locations this year across its eight formats, with 95 percent of the openings outside Spain.
Over 40 percent of the commercial retail space which it will add will be in Asia, including its first opening in India in May.
"The opening in India will be very strategic for the medium term," said Inditex chief executive Pablo Isa who added that China would be the "major driver" of the company's Asian expansion.
Zara, which opened its first shop in China in 2007, plans five branches in India in 2010, starting in New Delhi followed by Mumbai and then other cities.
Investment bank Goldman Sachs predicts India, the world's second-most populous country after China, will expand annually by some 6.2 percent from 2011 to 2050.
Many members of India's rising middle class are already familiar with Zara's stylish designs which resemble those of the big-name Italian fashion houses and are sold at moderate prices.
Inditex is controlled by Amancio Ortega, Spain's richest man. - AFP/vm
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