Zara has overtaken Gap to become the largest fashion retailer by sales in the world.

The Spain-based Inditex chain edged ahead of US-based retailer Gap as Zara’s sales rose 9 per cent to €2.22 billion (£1.75 billion) in the first quarter of it financial year.

For the same period sales at Gap dropped 10 per cent to €2.17 billion (£1.71 billion).

Zara began in Spain in 1975 and has expanded into 70 countries, operating almost 3,900 stores. Its parent Inditex, which also runs Berksha and Massimo Dutti, has been increasingly successful with its fast fashion offer. It also has a homewares offer, Zara Home, which was launched in the UK in 2006.

Gap has 3,100 shops worldwide and has struggled to keep sales strong particularly in the US where is has been hard hit by the economic slow down. Last week, it also announced it had axed its European design team, which will affect about 80 jobs.

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