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Zara founder ramps up global property buys to cut $104 billion wealth tax
Zara founder ramps up global property buys to cut $104 billion wealth tax

Business Standard

time18-07-2025

  • Business
  • Business Standard

Zara founder ramps up global property buys to cut $104 billion wealth tax

The Inditex SA founder's family office, Pontegadea, snapped up a five-star Paris hotel, a Florida apartment block and a building on Barcelona's iconic Diagonal Avenue as part of transactions Bloomberg Zara founder Amancio Ortega's private investment firm is on a global deal spree, picking up a string of trophy assets in recent weeks as he seeks to deploy his expanding fortune to avoid wealth taxes. The Inditex SA founder's family office, Pontegadea, snapped up a five-star Paris hotel, a Florida apartment block and a building on Barcelona's iconic Diagonal Avenue as part of transactions totaling more than $500 million in the past three months, according to data compiled by Bloomberg. The A Coruna, Spain-based firm is also in talks to buy an office building in Miami for $275 million, lining up a further addition to Europe's biggest real estate empire owned by an individual investor. The spending spree coincides with him receiving his biggest-ever annual dividend from the retail giant he founded more than six decades ago, with about half the expected €3.1 billion ($3.6 billion) paid out in early May. In a legal quirk, Ortega – Inditex's biggest shareholder with a 59% stake — must swiftly spend those payouts or face handing over a chunk of it in extra taxes in Spain, the only European Union nation that currently has a full-on wealth tax for rich residents. 'For Pontegadea the choice is simple: redeploy every euro of that Zara dividend or watch eight-figure cash bleed away every year,' said Marc Debois, founder of FO-Next, an advisory firm for family offices. 'This is liability management, not trophy-hunting.' Dividend Payouts Pontegadea's assets have swelled from the dividend payouts over the years, shaping it into one of the world's largest – and most active – family offices. Many of these firms are becoming increasingly influential in global business thanks to the wealth at their disposal and the need for reinvestment. Pontegadea had net assets of €34.3 billion at the end of last year, up 10.6% from 12 months earlier, according to registry filings published this month. Ortega's Inditex stake, though, still makes up the bulk of his wealth. At least a fifth of individuals among the world's 500 biggest fortunes now have a family office that help to oversee fortunes totaling more than $4 trillion, according to the index. In Europe, Ortega trails only LVMH founder Bernard Arnault on Bloomberg's list of richest individuals. Ortega founded the company that grew into Inditex in 1963. The son of a railroad worker, the billionaire never had his own office while he worked at the retailer, preferring to be alongside employees in the main design area. He stepped down as chairman in 2011 and was replaced by long-time executive Pablo Isla. His only child from his second marriage, 41-year-old Marta Ortega, took over in 2022. Sandra, 56, the daughter from his first marriage, controls the shares that her late mother held in Inditex. She doesn't have a role in the business and has diversified her own fortune into real estate, pharmaceuticals and hospitality. Her $12.4 billion net worth makes her Spain's richest woman, according to the Bloomberg Billionaires Index. Through Pontegadea, Amancio Ortega owns iconic properties such as New York's Haughwout Building, the Southeast Financial Center in Miami and London's The Post Building. He also controls prime residential and commercial real estate in cities from Toronto to Seoul — buildings that count Facebook, Inc., Zara, and even rival Hennes & Mauritz AB among tenants. In addition to real estate, Pontegadea can invest in energy infrastructure or stakes of at least 5% in publicly listed companies to reduce the threat of Spain's wealth taxes. The family office acquired major holdings in Spanish gas transportation operator Enagas SA in 2019 and, two years later, a Portuguese rival. For its infrastructure bets, Pontegadea has repeatedly turned to buyout giant KKR & Co Inc., underscoring the scale of the family office's investing operations. In 2018, it joined the Wall Street firm in becoming a shareholder in Telefonica SA's tower unit and the firms have since closed at least two further deals, including Pontegadea buying a 20% stake in KKR-controlled Dutch parking operator Q-Park during December. Pontegadea is also in talks with firms including KKR to acquire the Sabadell Financial Center building in Miami.

Zara Owner Inditex Posts Slowing Growth
Zara Owner Inditex Posts Slowing Growth

Business of Fashion

time12-06-2025

  • Business
  • Business of Fashion

Zara Owner Inditex Posts Slowing Growth

Zara owner Inditex SA reported a muted start to the second quarter and warned that foreign-exchange fluctuations could have a greater impact on results this year than anticipated. The shares tumbled. Revenue at the world's largest listed clothing retailer rose 6% in the five weeks to June 9, excluding currency effects. That was weaker than last year's start to the summer season, the Arteixo, Spain-based retailer said on Wednesday. 'The release fails to dispel concerns on slowing growth,' analysts at Barclays wrote in a note. The company's shares fell as much as 6.4 percent in early Madrid trading. The stock is down about 4.7 percent since the start of the year. Even though current trading is tracking higher than the 4.2 percent sales growth recorded in the first quarter, the latest numbers suggest that Inditex, like its peers, is not immune to a drop in demand prompted by the global trade war. The company has fared better than many of its rivals by keeping tighter controls on inventory, enabling it to remain nimble in a fickle fashion industry, but its sales-growth rates have headed down sharply from the post-pandemic boom era. Swedish rival Hennes & Mauritz AB posted disappointing first-quarter results because of stockpiles of unsold clothing. Foreign-exchange swings are likely to be a greater-than-expected drag on revenue this year, Inditex warned. The company expects currency fluctuations to shave 3 percent off sales this year, up from 1 percent it had expected previously. The adjustment follows a notable depreciation in both the US dollar and the Mexican peso against the euro, shrinking international earnings when converted back to the company's home currency. Other retailers have also signalled the cooling effect FX swings are having with H&M citing a strong kroner as another reason for its weak first-quarter. Last month, German sneaker brand Puma AG said the effect of tariffs and currency fluctuations was challenging to manage. The global garment industry tends to be a dollar-denominated business, which can particularly affect European retailers when they translate earnings back into local currencies. Inditex first spooked the market in March when it signalled a weaker start to its fiscal year, provoking a 7.5 percent fall — the biggest single-day plunge in its shares in five years. In its first quarter ended April 30, operating profit was in line with analyst estimates, while revenue was below expectations. The retailer said costs grew 2.3 percent in the period, rising faster than the 1.5 percent increase in revenue, including currency swings. Asked about the effect of President Donald Trump's tariffs, Inditex said it would use its broad range of suppliers, including those close to home in Spain, Portugal, Turkey and Morocco to manage the situation. 'In any case, I'd say that we see growth opportunities globally, not just in one market,' said Investor Relations Director Gorka Garcia-Tapia Yturriaga on a call with analysts. Over the last few years, the company has invested in both expanding its network of stores and also on refurbishing existing outlets to ensure a better shopping experience for customers. The company plans to spend €1.8 billion ($2 billion) again this year on store improvements and technology, along with an additional €900 million to expand its logistics network. By Clara Hernanz Lizarraga Learn more: The Brewing Controversy Over the Cotton in Your T-Shirt Zara owner Inditex, the world's largest fast fashion company, is ditching the industry's biggest sustainable cotton scheme amid a deforestation scandal and a wider push to prioritise organic fibres.

Zara-Owner Inditex Sales Rise Even as Global Economy Cools
Zara-Owner Inditex Sales Rise Even as Global Economy Cools

Bloomberg

time11-06-2025

  • Business
  • Bloomberg

Zara-Owner Inditex Sales Rise Even as Global Economy Cools

Zara-owner Inditex SA's sales picked up in the early weeks of the second quarter, showing that a cooling global economy hasn't stopped customers from loading up on its fast-fashion products. Revenue at the world's largest listed clothing retailer, not including currency effects, rose 6% in the five weeks to June 9 and grew faster than in the first quarter. Operating profit and revenues for that period were in line with analyst estimates.

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