Spanish fashion retailer Inditex SA has reached an agreement to purchase from German Otto Group a 28 percent stake in the share capital of Zara Deutschland, the company that operates Zara stores in the German market.
Inditex has thus raised its stake in the joint venture from 50 percent to 78 percent, while Otto Group holds the remaining 22 percent. The transaction must be approved by the Anti-Trust Authorities and endorsed by Otto Group shareholders.
Inditex began its expansion in Germany with the launching of its first Zara store in Cologne back in September 1999. Since then, Zara is present in the major cities of the country, where it has 41 outlets.
The German market holds a relevant place among Inditex's expansion targets for Europe. The Group opened ten stores in Germany last year, and a further twelve openings are expected throughout 2006. Zara will launch its fourth outlet in Berlin this year.
The agreement reached in Germany that grants Inditex the majority stake in its German subsidiary follows the example of other agreements recently reached with regard to potentially relevant markets, such as Italy and Japan, two countries where the Group began trading through 50-50 joint ventures with local partners.
In Italy, Inditex now owns 80 percent of its subsidiary while in Japan it now holds 100 percent. In that regard, it currently holds a 100 percent stake in Zara Russia (company that operated the brand through a franchise agreement) as well as the majority stake in Zara Poland (which was also operated via a franchise agreement).
Inditex SA is one of the worlds largest fashion distributors, with eight sales formats -Zara, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home y Kiddy's Class- boasting 2,696 stores in 62 countries.