Inditex to be Spain’s most valuable group
By The Financial Times
Inditex, owner of the Zara clothes brand, is set to overtake Telefónica to become Spain’s most valuable listed company as market turmoil shaves billions from the capitalisations of the country’s more established corporations.
The Galicia-based retailer, 59 per cent owned by its founder Amancio Ortega, Spain’s richest man, briefly overtook the telecoms operator on Monday, according to Reuters data. Both groups were valued at €43.12bn on Tuesday morning.
The news came as Spain reported its worst monthly retail data, with April sales down 9.8 per cent on the year before. Last month was the 22nd consecutive fall in retail sales.
Listed on the Madrid stock exchange in 2001 at a price of €14.70, Inditex shares on Monday closed at €69. The group has been one of the few large Spanish listed companies to continue to increase in value, rising 10 per cent in a year.
Telefónica shares have lost 43 per cent of their value in a year as the company has struggled with difficult trading conditions in its home market and net financial debt of €57.1bn, prompting credit rating downgrades and a dividend reduction.
Banco Santander, Spain’s largest lender by assets, is third in the Ibex 35 with a value of €42.6bn, having dropped 44.7 per cent in a year in a reflection of concerns over the impact of mounting property loan losses across Spain’s banks and elevated borrowing costs.
Inditex, which is now the world’s largest clothes retailer by value, last year opened 411 new stores globally – more than one a day – as net profits increased from €1.73bn to €1.93bn and net sales rose 10 per cent.
The reshuffling at the top of Spain’s corporate sector comes as companies have been scrambling to emphasise their international operations, predominantly in Latin America, as profits at home collapse.
Both Telefónica and Santander generate the bulk of their revenues away from Spain, with the latter reporting €7.5bn of revenues in Latin America in the first quarter compared with €1.67bn in Spain.