Shorts in Inditex: it has reached its point of maturity


Morgan Stanley | One of the main calls of our retail analyst Geoff Ruddell (and outside the consensus) is to short Inditex.

There is no doubt that Inditex is a high quality and well-managed business with an impressive track record. However, this is all already in the price and with stores in countries which represent 95% of global GDP, it has already reached its maturity point and its capacity for growth seems very limited. In addition, it is affected by the same risks as the rest of its industry, lack of fashion trends, increase in competition, pressure of online sales.


Inditex grafico

On the other hand, the recent accounting changes in the company related to the capitalisation of IT costs, the extension of the useful life of its assets, impairment of provisions etc suppose an additional risk for Inditex, which it appears that investors are not taking into account. A good time, therefore, to meet our analyst.


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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.