Today in retail: Zara's store shake-up hits bottom line

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Fast fashion high-flier Zara latest full-year results were uncharacteristically subdued today as changes to its store portfolio impacted profits.

The retail giant’s UK division reported a 32% dive in pre-tax profit to £39.2m, proving that even the most resilient fashion players are not immune to challenging market conditions.

The retailer maintained form with its sales, which were up an impressive 13%, and attributed its decline in profits to investments across the business.

Zara refurbished a selection of its stores in order to “keep the stores’ layout and atmosphere in line with the Zara brand image” and closed branches in Oxford Circus and Gatwick, as well as relocating its London headquarters.

But even with these changes to its retail portfolio taken into account, it’s hard to imagine that the cocktail of the weak pound, falling consumer confidence and shifting shopper spend didn’t also impact Zara’s profit drop.

And if a fashion force as powerful as Zara is not immune to the UK’s current fashion slowdown, less secure players in the sector are likely to be feeling nervous.

Also today Sainsbury’s has landed itself in hot water over its latest superstore after it emerged that affordable homes comprised just 4% of its proposed development and September footfall was dragged down by falling numbers of high street shoppers.