Zara Billionaire Widens Lead on Rivals: Chart of the Day
Amancio Ortega, the world’s third-richest man, widened his lead over billionaire fast-fashion rivals Stefan Persson and Tadashi Yanai last week, as strong performance from his Inditex SA (ITX) gave further rise to a fortune that has risen more than 57 percent since the March 2012 debut of the Bloomberg Billionaires Index.
The CHART OF THE DAY shows Ortega’s Inditex is the only one among Persson’s Hennes & Mauritz AB and Yanai’s Fast Retailing (9983) Co. with an expanding margin on earnings before interest, taxes, amortization and one-time items the past three years on a trailing 12-month basis. The middle panel shows the store count for the Arteixo, Spain-based retailer, which also includes Massimo Dutti products, has grown to 6,100 outlets, more than twice that of Persson’s H&M (HMB) and five-fold more than the chain controlled by Yanai, Japan’s richest man.
The bottom panel compares consensus analyst recommendations, with Zara’s operator scoring 3.5 out of a possible 5, compared with 2.9 for Stockholm-based H&M and 2.7 for Uniqlo-led Fast Retailing.
“Inditex has managed to outdo rivals such as H&M and Fast Retailing in Ebitda because it’s better at readjusting its different brands and launching new ones,” Francisco Salvador, a Madrid-based strategist at FGA/MG Valores, said in a phone interview. “Zara is both cheap and cool. A top model or even a princess may regularly buy at Prada, but they would also be proud of wearing and showing off Zara clothes. They will probably never acknowledge wearing H&M or Uniqlo, though.”
Ortega, 77, has a net worth of $61.1 billion, according to the index, a rise from $38.8 billion in March 2012 and up 6 percent in 2013. Sweden’s Persson is the world’s 16th-richest person with $29.7 billion, up 21 percent this year. Yanai is ranked 41st with $18.4 billion, a 46 percent increase.
Inditex reported a 0.7 percent rise in first-half profit to 951 million euros ($1.3 billion) on Sept. 18. The performance beat the 934 million-euro average of seven estimates compiled by Bloomberg. Inditex revenue increased 5.7 percent in the first half to 7.7 billion euros. H&M reported monthly sales that beat analysts’ estimates last week, sending shares to a record high. The company will report third-quarter earnings on Sept. 26.
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