INDUSTRIA DE DISENO TEXTIL, S.A.
[pic]

Financial Statements Analysis
Case Study

OUTLINE

1. Introduction: economic and sector situation analysis
2. History of INDITEX
3. Strategy of INDITEX
4. Economic and Financial Analysis a) Balance Sheet and Income Statement of INDITEX b) Balance Sheet and Income Statement of H&M c) Main ratios for INDITEX and H&M D) Interpretation of financial statements, situation of INDITEX, Comparison of INDITEX vs. H&M E) Conclusions
5. Provisional and forecast for 2009 and 2010
6. Annex and sources
1. Introduction: economic and sector situation analysis The textile industry is acting in a business of basic commodities. Being not substitutable it ensures a high demand around the globe. Especially here, in Europe, we can find leading fashion brands. Typically for the zone, like in the United States, firms are operating mainly in design and retailing, while production is often outsourced from Asian countries. The current economic crisis also has an impact on the sector and hits therefore especially hard factories, e.g. in India, for which garment production is one of the largest employment fields. They are the first to feel the decline in sales. Most recently the emerge of a new form of selling, e-retailing, which in times of financial downturn is making high profits, is causing changes in the industry. The market for clothing faces strong segmentation. According to quality and price of products, brands focus their strategy on different customers. On one hand we have Haute Couture labels like Chanel or Giorgio Armani and on the other hand low-cost brands such as Primark or others so called “white brands” or private brands.

2. History of INDITEX Inditex Group is a conglomerate of companies, mainly textile enterprises, but also from other sectors. Nowadays, Inditex is one of the world's largest fashion retailers and owns eight different