Zara’s UK unit saw profits dip by more than one-third in 2013, according to The Guardian, which reports that the chain “slashed” the dividend that it pays to Spanish-based parent company Inditex. It says that pre-tax profits were down 34.5 percent, ending up with GBP 33.9m. Its payment to Inditex to just GBP 22m, down from GBP 30m in 2012, though the company claims there is no correlation between the two items. Total sales in UK Zara stores rose 3.4 percent to GBP 457.8m, but rising costs of goods (up 10 percent) hit the company’s gross margin which fell to 54.7 percent (from 57.4 percent). Price competition from other high street brands is being blamed for the poor result.
