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The logic of fashion

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Teresa Sádaba

Director of ISEM Fashion Business School

Sometimes, the logic of fashion is not the logic of the financial markets. The good results announced by Inditex have been accompanied by a bad reaction in the stock market, with significant falls for the Galician business . Investors' expectations and forecasts had an impact on this stock market behavior, when however, from a sectorial analysis, the genius of the Galician giant to adapt to the changes in consumption patterns and to the different markets is once again admired.

Indeed, its competitors, with tighter results, are amazed at the constant innovation and flexibility practiced by Inditex. From the technological point of view, they are able to integrate the physical and digital channels like no one else, the phygital that everyone talks about, but which is so difficult to apply. The chains at group are able to transmit a unique experience in both channels, with great satisfaction on the part of Username, and business is working with an integrated stock, i.e., they are able to order orders as is most efficient for the customer and thus do not lose margin.

But it is not only technology that gives them a differential value, innovation also occurs in the product. Its offer, always very fashion-oriented, is raising the profile and raising the brand perception with collaborations, such as the one with designer Narciso Rodriguez, while expanding its product category, such as ski clothing this winter or new lines of items for dogs. Flexibility is also evident in the testing of initiatives such as the one being developed in the United Kingdom in the second-hand market and garment repairs, or in the search for new fibers and materials.

After the accelerated closure of its stores in Russia, the CEO of group has announced a new expansion strategy in the American market, a real challenge in an inflationary situation and with an extremely pragmatic consumer like the American one. Another challenge is a different price range, especially in the more premium chains such as Massimo Dutti, and its new affordable luxury line, Studio.

Despite these future question marks, Inditex's fashion business seems to be on an interesting course and sets a very high bar for those who intend to follow. The consumer is already doing so. Now it remains for investors to clear up their doubts.