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UPDATE 1-Zara-owner Inditex 9 month net up 42 pct

Published 12/15/2010, 01:31 AM
Updated 12/15/2010, 01:36 AM

* 9 month net profit up 42 percent to 1.179 bln euros

* 9 month sales up 14 percent to 8.866 bln euros

* Constant exchange sales up 10 percent Aug.1-Dec.12

(Adds details, background)

MADRID, Dec 15 (Reuters) - The world's biggest clothing retailer Inditex booked a 42 percent rise in nine-month net profit on Wednesday, buoyed by developing market growth and new store openings.

Cash-rich Inditex, which launched online sales of items such as black net skirted cocktail dresses for under 50 euros for its flagship brand Zara in September, said sales grew 14 percent during the period.

Net profit for the nine-month period was 1.18 billion euros ($1.6 billion), exactly in line with a Reuters poll.

The company's fast-fashion business model, which speeds catwalk designs to its stores worldwide, allows it to respond quickly to demand. Europe's retailers are seeing a tick-up in business, especially in emerging economies.

Inditex, which operates nearly 5,000 stores in 77 countries, said sales in local currencies grew 10 percent from Aug. 1 to Dec. 12.

Shares in Inditex have risen around 45 percent since the beginning of the year, thanks to strong sales and healthy margins, while Spain's blue-chip index has dropped about 15 percent.

Inditex's rival H&M of Sweden has risen around 18 percent so far this year.

Inditex, owner of youth label Bershka and preppie brand Massimo Dutti, has reduced exposure to the sluggish economy of home base Spain, which accounted for 28 percent of sales in the first half, down from 32 percent in the first half of 2009.

The company, founded by Spain's richest man Amancio Ortega, who started his career selling dressing gowns in northern Spain in the sixties, is trading at around 23 times this year's earnings, against H&M at around 20.5 times. (Reporting by Sonya Dowsett; Editing by Will Waterman) ($1=.7454 Euro)

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