Zara UK, the UK subsidiary of Spanish fashion giant Inditex, has slumped into the red.
The group, which operates the eponymous chain, Pull and Bear, Massimo Dutti and Bershka in the UK, suffered a pre-tax loss of £20m in the year to January 31, versus a £4.5m profit the year before.
According to documents filed at Companies House, sales rose 16% to £275.1m over the period, primarily due to store openings. Gross margin fell to 51.5%, against 58.3% the previous year – mostly due to currency effects.
The group said it had suffered after heavy investment in expansion and improvements to stores. It opened seven stores over the period, including a flagship at shopping centre Westfield London, and London Oxford Street flagships for Massimo Dutti and young fashion chain Pull and Bear, taking its total UK store count to 63.
The retailer added: “General retail trading conditions in the UK for 2009 have been difficult and unstable. The clothing sector is enduring a roller-coaster ride due to the combined effects of low consumer confidence and unstable weather.”
Despite this, the company said it had delivered “good” like-for-like sales growth.