Shares of the Spanish parent company of fast fashion giant Zara rose Tuesday to their highest level ever, making its ultra-wealthy billionaire cofounder richer in the process.
Shares of Inditex (full name Industria de Diseño Textil S.A.) rose as much as 2% to €36.95, or $40.43, in Tuesday trading in Spain.
That’s the highest share price in euros for Inditex since it went public in 2001, according to FactSet data.
Inditex’s stock is now up 48% this year, swelling the firm’s market capitalization to about $125 billion, placing it among the 100 most valuable public companies in the world.
Inditex shares’ recent run-up precedes the company’s quarterly earnings report next month; analysts project Inditex to report €1.6 billion in third-quarter net income, a nearly 20% higher gross profit than any other period.
Inditex’s 87-year-old cofounder and majority shareholder Amancio Ortega saw his fortune grow by $1 billion Tuesday, rising to $94.4 billion. Ortega is the world’s 13th-wealthiest person and Europe’s second-richest man.
Ortega was actually briefly the wealthiest person on the planet in 2016, though his position slipped in Forbes’ billionaire rankings as Inditex endured several years of stock market struggles. Shares slipped more than 40% from their 2017 prior peak to its 2022 nadir. Zara accounted for 73% of Inditex sales last year, while Europe brought in about 60% of Inditex’s revenue, while North and South America accounted for 20% of sales, combined. Joining Inditex in posting strong market performance this year are rivals H&M, whose shares are up 46% year-to-date, and Uniqlo parent Fast Retailing, whose shares are up 22%. Inditex’s $32.9 billion in 2022 sales easily topped Fast Retailing’s $18.4 billion and H&M’s $17.4 billion.
What To Watch For
The upstart Chinese fast fashion firm Shein is aiming to eventually go public in the U.S. at an up to $90 billion valuation, Bloomberg reported earlier this month, setting itself up to record one of the largest initial public offerings ever.
For years, the fast fashion industry has faced significant backlash for the sourcing of its labor and its large carbon footprint. Shein has faced the sharpest criticism for its alleged reliance on forced labor in China’s Xinjiang region, but Zara and Uniqlo have also faced international probes for the alleged use of forced Chinese labor, while H&M stopped sourcing labor from Myanmar in August due to worker abuse allegations. Research also suggests fast fashion is associated with of carbon dioxide emissions.