Apparel Retail In Spain 3ve5a

MarketLine Industry Profile

Apparel Retail in Spain May 2015 Reference Code: 0180-2005

Publication Date: May 2015

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EXECUTIVE SUMMARY Market value The Spanish apparel retail industry grew by 1.7% in 2014 to reach a value of $18 billion.

Market value forecast In 2019, the Spanish apparel retail industry is forecast to have a value of $18.6 billion, an incre ase of 3.3% since 2014.

Category segmentation Womenswear is the largest segment of the apparel retail industry in Spain, ing for 53.7% of the industry's total value.

Geography segmentation Spain s for 4.4% of the European apparel retail indus try value.

Market rivalry Continuous decline in recent years (with the exception of low growth in 2014) has resulted in an increased level of rivalry in the Spanish apparel retail industry.

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TABLE OF CONTENTS Executive Summary..........................................................................................................................................................................2 Market value ..................................................................................................................................................................................2 Market value forecast...................................................................................................................................................................2 Category segmentation................................................................................................................................................................2 Geography segmentation ............................................................................................................................................................2 Market ri valry .................................................................................................................................................................................2 Market Overview ...............................................................................................................................................................................7 Market definition............................................................................................................................................................................7 Market analysis .............................................................................................................................................................................7 Market Data........................................................................................................................................................................................8 Market value ..................................................................................................................................................................................8 Market Segmentation .......................................................................................................................................................................9 Category segmentation................................................................................................................................................................9 Geography segmentation ..........................................................................................................................................................10 Market distribution ......................................................................................................................................................................11 Market Outlook ................................................................................................................................................................................12 Market value forecast.................................................................................................................................................................12 Five Forces Analysis ......................................................................................................................................................................13 Summary......................................................................................................................................................................................13 Buyer power.................................................................................................................................................................................14 Supplier power ............................................................................................................................................................................15 New entrants ...............................................................................................................................................................................16 Threat of substitutes...................................................................................................................................................................17 Degree of rivalry..........................................................................................................................................................................18 Leading Companies........................................................................................................................................................................19 Artsana S.p.A. .............................................................................................................................................................................19 C&A Europe.................................................................................................................................................................................21 Industria de Diseno Textil, S.A. ................................................................................................................................................22 H & M Hennes & Mauritz AB .....................................................................................................................................................25 Macroeconomic Indicators.............................................................................................................................................................28 Country Data ...............................................................................................................................................................................28 Methodology ....................................................................................................................................................................................30

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Industry associations..................................................................................................................................................................31 Related MarketLine research....................................................................................................................................................31 Appendix...........................................................................................................................................................................................32 About MarketLine........................................................................................................................................................................32

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LIST OF TABLES Table 1: Spain apparel retail industry value: $ billion, 2010–14................................................................................................8 Table 2: Spain apparel retail industry category segmentation: $ billion, 2014........................................................................9 Table 3: Spain apparel retail industry geography segmentation: $ billion, 2014 ..................................................................10 Table 4: Spain apparel retail industry distribution: % share, by value, 2014.........................................................................11 Table 5: Spain apparel retail industry value forecast: $ billion, 2014 –19...............................................................................12 Table 6: Artsana S.p.A.: key facts ................................................................................................................................................19 Table 7: C&A Europe: key facts ....................................................................................................................................................21 Table 8: Industria de Diseno Textil, S.A.: ke y facts ...................................................................................................................22 Table 9: Industria de Diseno Textil, S.A.: ke y financials ($).....................................................................................................23 Table 10: Industria de Diseno Textil, S.A.: ke y financials (€) ..................................................................................................23 Table 11: Industria de Diseno Textil, S.A.: ke y financial ratios ...............................................................................................23 Table 12: H & M Hennes & Mauritz AB: key facts .....................................................................................................................25 Table 13: H & M Hennes & Mauritz AB: key financials ($).......................................................................................................26 Table 14: H & M Hennes & Mauritz AB: key financials (SEK) .................................................................................................26 Table 15: H & M Hennes & Mauritz AB: key financial ratios ....................................................................................................26 Table 16: Spain size of population (million), 2010–14..............................................................................................................28 Table 17: Spain gdp (constant 2005 prices, $ billion), 2010–14 .............................................................................................28 Table 18: Spain gdp (current prices, $ billion), 2010–14..........................................................................................................28 Table 19: Spain inflation, 2010–14...............................................................................................................................................29 Table 20: Spain consumer price index (absolute), 2010–14 ...................................................................................................29 Table 21: Spain exchange rate, 2010–14...................................................................................................................................29

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LIST OF FIGURES Figure 1: Spain apparel retail industry value: $ billion, 2010–14...............................................................................................8 Figure 2: Spain apparel retail industry category segmentation: % share, by value, 2014 ....................................................9 Figure 3: Spain apparel retail industry geography segmentation: % share, by value, 2014 ..............................................10 Figure 4: Spain apparel retail industry distribution: % share, by value, 2014 .......................................................................11 Figure 5: Spain apparel retail industry value forecast: $ billion, 2014 –19 .............................................................................12 Figure 6: Forces driving competition in the apparel retail industry in Spain, 2014...............................................................13 Figure 7: Drivers of buyer power in the apparel retail industry in Spain, 2014 .....................................................................14 Figure 8: Drivers of supplier power in the apparel retail industry in Spain, 2014 .................................................................15 Figure 9: Factors influencing the likelihood of new entrants in the apparel retail industry in Spain, 2014 .......................16 Figure 10: Factors influencing the threat of substitutes in the apparel retail industry in Spain, 2014 ...............................17 Figure 11: Drivers of degree of rivalry in the apparel retail industry in Spain, 2014 ............................................................18 Figure 12: Industria de Diseno Textil, S.A.: re venues & profitability.......................................................................................24 Figure 13: Industria de Diseno Textil, S.A.: assets & liabilities ...............................................................................................24 Figure 14: H & M Hennes & Mauritz AB: revenues & profitability ...........................................................................................27 Figure 15: H & M Hennes & Mauritz AB: assets & liabilities ....................................................................................................27

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MARKET OVERVIEW Market definition The apparel retail industry consists of the sale of all menswear, womenswear and childrenswear. The menswear market includes mens activewear, casual wear, essentials, formalwear, formalwear-occasion and outerwear. The womenswear market includes women's activewear, casual wear, essentials, formalwear, formalwear -occasion and outerwear. The childrenswear market includes baby clothing, boys activewear, boys casual wear, boys essentials, boys formalwear, boys formalwear-occasion, boys outerwear, girls activewear, girls casual wear, girls essentials, girls formalwear occasion, girls outerwear and toddler clothing. The industry value is calculated at retail selling price (RSP), and includes all taxes and levies. All currency conversions used in this report have been calculated at constant 2014 annual average exchange rates. For the purposes of this report, North America consists of Canada, Mexico, and the United States. South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela. Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, , , Greece, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom. Scandinavia comprises Denmark, Finland, Norway, and Sweden. Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam. Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.

Market analysis The Spanish apparel retail industry shrank considerably over the period 2010 -2014. The market is set to recover only marginally over the forecast period. With the increase in the VAT rate from 18% to 21% from 1 September 2012 and an unemployment rate that has reached over 23% in 2015, the Spanish apparel retail industry has been negatively affected b y economic conditions . The Spanish apparel retail industry had total revenues of $18.0bn in 2014, representing a compound annual rate of change (CARC) of -5.1% between 2010 and 2014. In comparison, the French and German industries grew with compound annual growth rates (CAGRs) of 0.4% and 1.3% respectively, o ver the same period, to reach respective values of $48.7bn and $76.9bn in 2014. The womenswear segment was the industry's most lucrative in 2014, with total revenues of $9.7bn, equivalent to 53.7% of the industry's overall value. The menswear segment contributed revenues of $5.9bn in 2014, equating to 32.8% of the industry's aggregate value. The performance of the industry is forecast to accelerate, with an anticipated CAGR of 0.7% for the fi ve -year period 2014 - 2019, which is expected to drive the industry to a value of $18.6bn by the end of 2019. Comparatively, the French and German industries will grow with CAGRs of 1.4% and 1.4% respectively, over the same period, to reach respective values of $52.1bn and $82.6bn in 2019.

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MARKET DATA Market value The Spanish apparel retail industry grew by 1.7% in 2014 to reach a value of $18 billion. The compound annual rate of change of the industry in the period 2010–14 was -5.1%.

Table 1: Spain apparel retail industry value: $ billion, 2010–14 Year

$ billion

€ billion

2010

22.2

16.7

2011

20.8

15.7

(6.1%)

2012

18.9

14.3

(9.1%)

2013

17.7

13.4

(6.3%)

2014

18.0

13.6

1.7%

CAGR: 2010–14 SOURCE: MARKETLINE

% Growth

(5.1%) M AR KE TL IN E

Figure 1: Spain apparel retail industry value: $ billion, 2010–14

SOURCE: MARKETLINE

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MARKET SEGMENTATION Category segmentation Womenswear is the largest segment of the apparel retail industry in Spain, ing for 53.7% of the industry's total value. The Menswear segment s for a further 32.8% of the industry.

Table 2: Spain apparel retail industry category segmentation: $ billion, 2014 Category

2014

%

Womenswear

9.7

53.7%

Menswear

5.9

32.8%

Childrenswear

2.4

13.6%

18

100%

Total SOURCE: MARKETLINE

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Figure 2: Spain apparel retail industry category segmentation: % share, by value, 2014

SOURCE: MARKETLINE

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Geography segmentation Spain s for 4.4% of the European apparel retail industry value. s for a further 18.6% of the European industry.

Table 3: Spain apparel retail industry geography segmentation: $ billion, 2014 Geography

2014

%



76.9

18.6

United Kingdom

63.0

15.3



48.7

11.8

Spain

18.0

4.4

Rest of Europe

205.9

49.9

Total

412.5

100%

SOURCE: MARKETLINE

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Figure 3: Spain apparel retail industry geography segmentation: % share, by value, 2014

SOURCE: MARKETLINE

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Market distribution Clothing, foot/sportswear & accessories retailers form the leading distribution channel in the Spanish apparel retail industry, ing for a 61.4% share of the total industry's value. Department stores s for a further 26.2% of the industry.

Table 4: Spain apparel retail industry di stribution: % share, by value, 2014 Channel

% Share

Clothing, foot/sportswear & accessories retailers

61.4%

Department stores

26.2%

Hypermarket, supermarket & discounters

7.7%

Discount, variety & general merchandise retailers

2.8%

Other

2.0%

Total

100%

SOURCE: MARKETLINE

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Figure 4: Spain apparel retail industry di stribution: % share, by value, 2014

SOURCE: MARKETLINE

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MARKET OUTLOOK Market value forecast In 2019, the Spanish apparel retail industry is forecast to have a value of $18.6 billion, an increase of 3.3% since 2014. The compound annual growth rate of the industry in the period 2014 –19 is predicted to be 0.7%.

Table 5: Spain apparel retail industry value forecast: $ billion, 2014–19 Year

$ billion

€ billion

% Growth

2014

18.0

13.6

1.7%

2015

18.0

13.6

0.0%

2016

18.1

13.6

0.5%

2017

18.2

13.7

0.7%

2018

18.4

13.9

1.0%

2019

18.6

14.0

1.1%

CAGR: 2014–19 SOURCE: MARKETLINE

0.7% M AR KE TL IN E

Figure 5: Spain apparel retail industry value forecast: $ billion, 2014–19

SOURCE: MARKETLINE

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FIVE FORCES ANALYSIS The apparel retail market will be analyzed taking retailers as players. The key buyers will be taken as individual consumers, and clothing manufacturers and wholes alers as the key suppliers.

Summary Figure 6: Force s driving competition in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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Continuous decline in recent years (with the exception of low growth in 2014) has resulted in an increased level of rivalry in the Spanish apparel retail industry. Clothing is an essential item, with consumer choice being influenced by factors such as fashion and a desire to signal social success. Demand patterns are susceptible to branding and advertising, which, despite the lack of significant switching costs, tends to weaken buyer power. There is a fast pace of change in the demands of individual buyers. This means that, in an attempt to maintain market share in a highly competitive market, players aim to attract customers by creating strong brand consciousness and running intensive marketing campaigns. Low barriers to entry and relatively low requirements for capital mean there is a high likelihood of new entrants in this market. Substitutes to apparel retail include bespoke tailoring, factory shops, homemade clothing, and second hand clothing, although these pose a minimal threat to market players. Sales are boosted by the popularity of fast-fashion and disposable clothing pioneered by Spanish retailer Inditex. Predominantly, this has been a visible factor of growth within the womenswear sector. However, as the fashion industry becomes more focused on styles for men, fast-fashion trends for menswear are becoming just as prevalent as those for women.

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Buyer power Figure 7: Drivers of buyer power in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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Buyer power in the apparel retail industry is weakened by the smal l size of buyers: virtually all buyers are individual consumers. What’s more, retailers tend to have large numbers of individual customers, which further weakens buyer power as the loss of one is unlikely to have a significant impact on revenues. Despite the fact that brand consciousness in this market is substantial, the loyalty of consumers to specific brands is not always the overriding factor in their decision making. The depth of price sensitivity varies regionally, although there is strong fashion awareness in more affluent areas. Buyer power is enhanced by a high level of choice, which is generated by the absence of switching costs. Brand loyalty within the top end of the apparel retail industry is connected more with the particular designer than the retailer, although some labels also have their own retail operations. There is a large market for non-designer apparel retail, especially among customers with lower disposable incomes. Retailers can differentiate themselves fairly strongly through the styles of clothing offered and the price range of this clothing, meaning buyer power is weakened. Apparel is an essential item for consumers, and they are significantly exposed to the penetration of marking icons and images into most forms of media. However, retailers must remain aware of the developments that shape public perception and subsequent demand. Despite consumers lacking financial muscle, the position of retailers at the end of the value chain makes it impossible to integrate forwards. This means that they are obliged to offer buyers what they demand, in a market often subject to unpredictable and rapid changes in fashion. These factors strengthen buyer power. Overall, buyer power is assessed as moderate.

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Supplier power Figure 8: Drivers of supplier power in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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The key suppliers in this industry are clothing manufacturers and wholesalers. These are typically small to medium sized enterprises, giving retailers the possibility to source from both. In Spain, the wholesale and clothing manufacturing sectors are fairly fragmented. Supplier fragmentation is made greater by the ability of retailers to source from foreign manufacturers. With the liberalization of international trade, supplier power in the Spanish industry is decreased through competition from manufacturers in low-wage regions, most notably China and India. Although retailers’ switching costs are not very high, switching includes the risk of choosing a supplier with a more extended supply chain or who may not be able to cope with sudden changes in demand on the market. The lack of diversity between suppliers weakens their power, as the apparel retail industry is highly important to their business. Apparel manufacturing is almost always labor intensive, due to the difficulty of automating processes such as the sewing of garments. The existence of a minimum wage in many countries slightly increases the power of suppliers of labor. The Bangl adesh Rana Plaza disaster in 2013, in which more than 1,100 people died and many were left injured; has put increasing ethical pressure on retailers to source responsibly. So far $21.5m has been paid into the Rana Plaza Donors Trust Fund through contributi ons from buyers, the Bangladesh Prime Ministers Fund and other private donors. A number of brands have refused to provide adequate payment into the fund. Walmart, Mango and The Children's Place have been criticized for making donations which fall short of expectations. Benetton initially was reluctant to pay into the fund; however in April 2015 the company made a $1.1m contribution. Overall, supplier power in this industry is assessed as moderate.

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New entrants Figure 9: Factors influencing the likelihood of new entrants in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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The Spanish apparel retail industry has shrunk in recent years, making it less attractive to new entrants. Barriers to entry are not high, with capital requirements being low enough for individuals to enter. However, a small number of large corporations, such as Inditex (Industria de Diseno Textil S.A.) and H&M, for a significant share of total market revenues. They benefit from scale economies that allow them to build brands in multiple retail outlets, and greater buying power when negotiating with suppliers. The latter allows them to compete more intensely on price. There is little regulation as such for retailers in the market, but there are some self-imposed conventions related to child labor, working conditions and workers' wages. New entrants who are known to have items manufactured outside of such conventions may lose customers and suffer long-term reputational damage. Low switching costs for buyers and a low level of product differentiation make it easier for new entrants to compete with existing players. With the increase in the VAT rate from 18% to 21% from 1 September 2012 and an unemployment rate that reached over 23% in 2015, the Spanish apparel retail industry has been negatively affected by economic conditions and has been in decline for several years, although some growth was seen in 2014. Overall, there is a strong threat of new entrants to this market.

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Threat of substitutes Figure 10: Factors influencing the threat of substitute s in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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While there are no substitutes for apparel as such, there are alternatives to retail. One option is purchasing clothing directly from the manufacturer as opposed to the conventional distribution chain. This is facilitated by the growth of online sales. All major apparel retailers now have their own online stores as there is an increased consumer acceptance of the internet as an alternative shopping channel. A growing number of ‘pureplay’ online fashion stores have emerged in the market, as they look to take advantage of lower running costs from not having to pay for the overheads incurred by running a high street store. The online sale avenue opens the door for manufacturers who may be tempted by the opportunity of selling directly to end s without the need for the retailer. Home-made and custom -made (couture) clothing are also niche alternatives to the retail of ready-made clothes. Counterfeit clothing can be a significant threat to the revenues of manufacturers. Another option is purchasing second hand clothing from charity shops and internet sites such as eBay. The threat of substitutes to the apparel retail industry is assessed as weak overall.

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Degree of rivalry Figure 11: Drivers of degree of rivalry in the apparel retail industry in Spain, 2014

SOURCE: MARKETLINE

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The Spanish apparel retail industry is typically composed of large numbers of similar retailers, many of which are independents. However, there is still room for large numbers of smaller players in this industry. Major increases in capacity may be fairly costly to smaller players if they require the outlay of opening additional outlets, although this may be lessened if it can be accomplished by taking on more staff on a flexible basis. While some retailers selling apparel have diversified into the retail of other items, such as jewelry, many retain a strong emphasis on women’s apparel specifically, which intensifies rivalry. A fast pace of change in fashions in the apparel retail industry does little to ameliorate rivalry, due to declining market performance in recent years. Though rivalry within the Spanish market is pronounced, international operations have helped to offset this somewhat. Mango and Inditex, two Spanish fashion retailers, reported strong results in FY2014, as strong international sales, particularly in emerging markets, have more than offset the effects of the weak local economy. With Spanish apparel retail sales growth predicted to be weak in the forecast period due to soaring unemployment, rivalry is expected to increase. Overall, rivalry is assessed as strong.

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LEADING COMPANIES Artsana S.p.A. Table 6: Artsana S.p.A.: key facts Head office:

Via S Catelli, 1 20070 Grandate, ITA

Telephone:

39 031 382111

Fax:

39 031 382400

Website:

www.artsana.com

Financial year-end:

December

SOURCE: COMPANY WEBSITE

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Artsana is an Italy based company trading health, cosmetic, and baby-related products. The company's products include baby clothing, strollers, car seats, toys, feeding products, and hygiene p roducts. Additionally, it manufactures both consumer and clinical health care supplies. The company primarily operates in Italy, where it is headquartered in Grandate. The Artsana Group is headed by Artsana S.p.A., which distributes Chicco and Artsana trad emark products in Italy, and manages manufacturing centers located throughout Italy and South East Asia. In Europe and the rest of the world, the Chicco and Artsana ranges are distributed by subsidiary companies controlled by the holding company Internatio nal Artsana S.A., which also controls Tecnilatex, the company specializing in the production of condoms. Through Prénatal Italy, the Artsana Group is also active in Spain, Portugal, Greece, Mexico, , Cyprus, Russia and Holland through the Prénatal distribution chain. The company operates through three divisions: Baby Products, Health Products and Cosmetics and Beauty Products. Artsana's Baby Products Division provides a global service through two main brands: Chicco and Parental. Chicco is a brand specializing in the study and implementation of non-food and infancy products. It offers products targeted to the needs of parents and children. Chicco has over 280 shops in Italy and two of them are Chiccolandias – stores providing a large play area for young children alongside a classic Chicco Shop. These shops have been opened in Grandate and Milan, with others to follow. Since 1995, the company has also comprised Prénatal – one of the largest European chains of shops specializing in the distribution of products for mothers and children up to the age of eleven. Specialization is based on constant research work, an awareness of different needs and the application of appropriate solutions, in both technical -practical and medical-psychological-relational . Artsana also retails Boppy products, having acquired the trademark in 2008. Boppy is the market leader in the US market for nursing pillows. Artsana also conducts a research project developed by its own in -house Study Centre, involving pediatricians, dentists and obstetricians. The Baby Products division offers a vast range of products intended for new -born baby care, from feeding to cosmetics, including articles such as games, clothes and shoes, prams and push -chairs, products for the home and the car, nappies, etc.

Key Metrics As a private entity, Artsana S.p.A. is not obliged to release its financial information.

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C&A Europe Table 7: C&A Europe: key facts Head office:

Wanheimer Strasse 70, 40468 Dusseldorf, DEU

Telephone:

49 211 9872 0

Website:

www.c-and-a.com

SOURCE: COMPANY WEBSITE

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C&A Europe (C&A), an enterprise of COFRA Holding, is involved in the ownership and operation of apparel retail chains. The company sells approximately 10,000 various products in 190 groups of goods including apparel for men, women and children. The company operates in 21 countries including Belgium, , , Luxembourg, the Netherlands, Austria, Poland, Portugal, Switzerland, Norway, Czech Republic and Spain. The company offers modern wear, classic wear, lingerie and sportswear for women. C&A provides men's wear such as casual wear, formal wear, sportswear and suits. It also offers childrenswear and clothing for new born babies. C&A markets its products under the brand names Yessica, a fashion label for the young; Yessica Pure for lifestyle oriented businesswomen; Your Sixth Sense provides formalwear for women; Angelo Litrico, modern fashion for males; Westbury; Canda, which offers a range of clothing for women and men; Clockhouse that offers clothing for young adults (18-25 year olds); Baby Club; Palomino for boys and girls (aged two -six); Here & There for boys and girls (aged seven14); and Rodeo Sport, fashionable leisurewear. The company provides services such care advice, guidance on purchases, and alteration services.

Key Metrics As a subsidiary of COFR A Holding, C&A is not obliged to release its financial information.

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Industria de Diseno Textil, S.A. Table 8: Industria de Diseno Textil, S.A.: key facts Head office:

Edificio Inditex, Avenida de la Diputacion, 15452 Arteixo, A Coruna, ESP

Telephone:

34 981 18 54 00

Fax:

34 981 18 55 44

Website:

www.inditex.com

Financial year-end:

January

Ticker:

ITX

Stock exchange:

Madrid

SOURCE: COMPANY WEBSITE

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Inditex is one of the largest fashion retailers in the world. It comprises more than 100 companies operating in textile design, manufacturing and distribution. The group markets its range of products through eight sales formats: Zara, Bershka, Pull & Bear, Massimo Dutti, Stradivarius, Oysho, Zara Home and Uterque. At the end of FY2015, Inditex operated 6,460 stores in 88 markets across Europe, the Americas and Asia. The group operates through three divisions: Zara, Bershka and other. Zara offers a wide range of fashion products for women, men and children. At the end of FY2015, Inditex operated around 2000 stores under the Zara brand (including the Zara Kids stores) in 88 markets. These stores are located in major cities throughout the world. Bershka offers fashion for young women and men (target market aged 13 -23). At the end of FY2015, Inditex operated 910 Bershka stores in 64 markets. The other division comprises the following sales formats: Pull & Bear, Massimo Dutti, Stra divarius, Oysho, Zara Home and Uterque. Pull & Bear offers casual fashion and sport styles for young men and women typically aged between 14 and 28. The group operated 900 Pull & Bear stores in the main streets and shopping centers of 65 markets at the end of FY2015, as well as five e-commerce platforms. Massimo Dutti offers international fashion collections for men, women and children. Inditex operated around 700 Massimo Dutti stores in 68 markets at the end of FY2015. Stradivarius offers urban fashion for young women typically aged 18 to 35. At the end of FY2015, the group operated 910 Stradivarius stores in 59 markets. Oysho offers women's loungewear, lingerie and undergarments. At the end of FY2015, Inditex operated 570 Oysho stores in 40 markets. Zara Home specializes in home furnishings. It offers textiles for bed, table and bathroom linens, as well as decorative items. The group operated 437 Zara Home stores in 48 markets at the end of FY2015. Uterque offers accessories, including bags, shoes and costume jewelry. Inditex operated 66 Uterque stores in 12 markets at the end of FY2015.

Key Metrics The company recorded revenues of $24,043 million in the fiscal year ending January 2015, an increase of 8.3% compared to fiscal 2014. Its net income was $3,319 million in fiscal 2015, compared to a net income of $3,155 million in the preceding year.

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Table 9: Industria de Diseno Textil, S.A.: key financials ($) $ million Revenues Net income (loss) Total assets

2011

2012

2013

2014

2015

16,624.6

18,305.2

21,162.7

22,195.6

24,043.1

2,298.3

2,564.0

3,133.1

3,154.7

3,318.5

13,040.6

14,544.1

17,107.2

18,256.5

20,407.4

Total liabilities

4,516.1

4,650.3

5,850.7

5,942.8

6,514.0

Employees

92,301

100,138

109,512

120,314

128,313

SOURCE: COMPANY FILINGS

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Table 10: Industria de Diseno Textil, S.A.: key financials (€) € million

2011

2012

2013

2014

2015

12,526.6

13,793.0

15,946.1

16,724.4

18,116.5

Net income (loss)

1,731.8

1,932.0

2,360.8

2,377.1

2,500.5

Total assets

9,826.1

10,959.0

12,890.3

13,756.3

15,377.0

Total liabilities

3,402.9

3,504.0

4,408.5

4,477.9

4,908.3

Revenues

SOURCE: COMPANY FILINGS

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Table 11: Industria de Diseno Textil, S.A.: key financial ratios Ratio

2011

2012

2013

2014

2015

Profit margin

13.8%

14.0%

14.8%

14.2%

13.8%

Revenue growth

13.0%

10.1%

15.6%

4.9%

8.3%

Asset growth

17.9%

11.5%

17.6%

6.7%

11.8%

Liabilities growth

14.8%

3.0%

25.8%

1.6%

9.6%

Debt/asset ratio

34.6%

32.0%

34.2%

32.6%

31.9%

Return on assets

19.1%

18.6%

19.8%

17.8%

17.2%

$180,112

$182,800

$193,246

$184,481

$187,379

$24,901

$25,605

$28,610

$26,221

$25,863

Revenue per employee Profit per employee SOURCE: COMPANY FILINGS

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Figure 12: Industria de Diseno Textil, S.A.: revenues & profitability

SOURCE: COMPANY FILINGS

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Figure 13: Industria de Diseno Textil, S.A.: assets & liabilities

SOURCE: COMPANY FILINGS

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H & M Hennes & Mauritz AB Table 12: H & M Hennes & Mauritz AB: key facts Head office:

Master Samuelsgatan 46A, 106 38 Stockholm, SWE

Telephone:

46 8 796 55 00

Fax:

Telephone:

46 8 796 57 03 Hennes & Mauritz S.L. C/Canuda 45- 47 planta 3 y 4, 08002 Barcelona, ESP 34 901 12 00 84

Website:

www.hm.com

Financial year-end:

November

Ticker:

H&M B

Stock exchange:

Stockholm

Local office:

SOURCE: COMPANY WEBSITE

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H & M Hennes & Mauritz AB (H&M) is a Sweden-based leading retailer of fashion apparel, cosmetics, accessories and shoes for women, men, teenagers and children. H&M's retail operations are conducted through leased store premises, internet and catalogue sales and through a network of franchise stores. At the end of FY2014, the group had 3,511 stores which included 110 franchise stores. Internet and catalogue sales are offered in Sweden, Norway, Denmark, Finland, the Netherlands, , Austria and the UK. Furthermore, H&M's home textile range, H&M Home, is offered for sale through internet and catalogues, and through stores in Stockholm, Helsinki, Copenhagen, London and Amsterdam among others. H&M's in-house designers work with pattern designers and buyers to create a range of merchandise. The group's design and buying department creates the collections centrally and outsources the manufacturing. After the merchandise is ready, it is purchased and distributed to a region and then allocated to separate sales countries in that region depending upon the demand in each market. In order to this operating style, H&M restructured its business process in 2007 and transferred the central design, buying, logistics and stock-keeping functions to a separate company, H & M Hennes & Mauritz GBC AB. The group outsources product manufacturing to 800 independent suppliers through its local production offices in Asia and Europe. Tests, such as chemical and laundry tests, are carried out on a continuous basis at the production offices and at external laboratories. The merchandise is subsequently transported by sea, rail, road or air to various distribution centers. The goods are then distributed directly to the stores or to central regional replenishment centers.

Key Metrics The company recorded revenues of $22,072 million in the fiscal year ending November 2014, an increase of 17.8% compared to fiscal 2013. Its net income was $2,912 million in fiscal 2014, compared to a net income of $2,500 million in the preceding year.

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Table 13: H & M Hennes & Mauritz AB: key financial s ($) $ million

2010

2011

2012

2013

2014

15,813.4

16,034.4

17,608.7

18,740.3

22,072.1

Net income (loss)

2,723.1

2,306.2

2,458.7

2,500.2

2,911.9

Total assets

8,626.9

8,773.5

8,771.3

9,573.5

11,019.6

Total liabilities

2,188.0

2,344.5

2,381.6

2,977.8

3,504.4

Employees

87,000

64,874

72,276

116,000

132,000

Revenues

SOURCE: COMPANY FILINGS

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Table 14: H & M Hennes & Mauritz AB: key financial s (S EK) SEK million

2010

2011

2012

2013

2014

108,483.0

109,999.0

120,799.0

128,562.0

151,419.0

Net income (loss)

18,681.0

15,821.0

16,867.0

17,152.0

19,976.0

Total assets

59,182.0

60,188.0

60,173.0

65,676.0

75,597.0

Total liabilities

15,010.0

16,084.0

16,338.0

20,428.0

24,041.0

Revenues

SOURCE: COMPANY FILINGS

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Table 15: H & M Hennes & Mauritz AB: key financial ratios Ratio

2010

2011

2012

2013

2014

17.2%

14.4%

14.0%

13.3%

13.2%

Revenue growth

7.0%

1.4%

9.8%

6.4%

17.8%

Asset growth

8.9%

1.7%

0.0%

9.1%

15.1%

Profit margin

Liabilities growth

9.2%

7.2%

1.6%

25.0%

17.7%

Debt/asset ratio

25.4%

26.7%

27.2%

31.1%

31.8%

Return on assets

32.9%

26.5%

28.0%

27.3%

28.3%

$181,763

$247,162

$243,631

$161,554

$167,213

$31,300

$35,549

$34,018

$21,554

$22,060

Revenue per employee Profit per employee SOURCE: COMPANY FILINGS

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Figure 14: H & M Hennes & Mauritz AB: revenue s & profitability

SOURCE: COMPANY FILINGS

M AR KE TL IN E

Figure 15: H & M Hennes & Mauritz AB: a ssets & liabilities

SOURCE: COMPANY FILINGS

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MACROECONOMIC INDICATORS Country Data Table 16: Spain size of population (million), 2010–14 Year

Population (million)

% Growth

2010

46.6

0.5%

2011

46.7

0.4%

2012

46.8

0.0%

2013

46.6

(0.2%)

2014

46.8

0.3%

SOURCE: MARKETLINE

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Table 17: Spain gdp (constant 2005 price s, $ billion), 2010 –14 Year

Constant 2005 Prices, $ billion

% Growth

2010

1,181.3

(0.2%)

2011

1,181.9

0.1%

2012

1,162.5

(1.6%)

2013

1,148.4

(1.2%)

2014

1,164.2

1.4%

SOURCE: MARKETLINE

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Table 18: Spain gdp (current prices, $ billion), 2010 –14 Year

Current Prices, $ billion

% Growth

2010

1,387.4

(4.8%)

2011

1,455.9

4.9%

2012

1,323.1

(9.1%)

2013

1,376.1

4.0%

2014

1,418.3

3.1%

SOURCE: MARKETLINE

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Table 19: Spain inflation, 2010–14 Year

Inflation Rate (%)

2010

2.0%

2011

3.1%

2012

2.4%

2013

1.5%

2014

(0.1%)

SOURCE: MARKETLINE

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Table 20: Spain consumer price index (absolute), 2010–14 Year

Consumer Price Index (2005 = 100)

2010

112.7

2011

116.2

2012

119.0

2013

120.8

2014

120.7

SOURCE: MARKETLINE

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Table 21: Spain exchange rate, 2010–14 Year

Exchange rate ($/€)

2010

0.7549

2011

0.7188

2012

0.7782

2013

0.7533

2014

0.7535

SOURCE: MARKETLINE

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METHODOLOGY MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross checked and presented in a consistent and accessible style. Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and ed by analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in -house databases provide the foundation for all related industry profiles Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends MarketLine aggregates and analyzes a number of secondary information sources, including: -

National/Governmental statistics

-

International data (official international sources)

-

National and International trade associations

-

Broker and analyst reports

-

Company Annual Reports

-

Business information libraries and databases

Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand -related factors Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

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Industry associations International Textile and Apparel Association PO Box 1360, Monument, CO 80132-1360, USA Fax: 1 719 488 3716 www.itaaonline.org

Consejo Intertextil Espagnol - CIE Granvia 670, ES - 08010 Barcelona, ESP Tel.: 34 93 318 9200 Fax: 34 93 302 6235 www.consetertextil.com

Related MarketLine research Industry Profile Apparel Retail in China Apparel Retail in Japan Apparel Retail in

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