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Profits soar for Inditex

Global expansion pays off for the owners of the Zara chain.



In spite of falling consumer spending in Europe, the Spanish fashion retailer Inditex has reported  a rise in net profits of 12 per cent in 2011 to €1.93bn (2010: €1.73bn).

Inditex, which is the world's largest fashion retailer by sales, opened its first Zara stores in Azerbaijan, Taiwan, Australia, South Africa and Peru last year. Following its debut in the Australian market, the retailer further cemented its position as a major global retailer with stores on five continents. Inditex has also opened Zara Home stores in Frankfurt, London and Amsterdam.

Net sales surged in all geographic areas by 10 per cent to €13.79bn, as against €15.53bn in 2010. Gross profit increased by 10 per cent to €8.18bn, while the gross margin remained the same.

Earnings before interest, taxes, depreciation and amortisation was €3.26bn in 2011, an increase of 10 per cent compared to €2.97bn in 2010.

With the opening of 483 new stores in 49 markets in 2011, the company’s number of outlets reached 5527. The group employed 9,374 people in 2011, bringing its workforce to 109,512 employees.

By the end of 2011, Inditex retailers had e-stores in 18 European countries. Zara’s online shop also began welcoming customers in the US and Japan.

For the period 1 February to 14 March 2012, the company’s store sales in local currencies increased by 11 per cent.

Inditex is planning to increase its total number of stores by up to 520 new establishments this year.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.