Inditex and the Financial Loops of Amancio Ortega
There are companies that make money selling clothes, and then there is Inditex, which also has a turnover of millions of euros building nursing homes for its own founder. Zara’s parent company earned an additional €49 million thanks to the orders that Amancio Ortega placed with Goa Invest, the group’s construction subsidiary, according to the annual report.
The Flow of Money
As highlighted by Vozpopuli, what is striking is not just the amount but the financial journey of this money: it leaves Ortega’s pockets, enters the coffers of Inditex, and often returns as dividends. This movement of capital emphasizes the interconnected financial framework that underlies Ortega’s business dealings.
Understanding the Figures
Inditex’s annual report specifies that the group charged €49 million to “Pontegadea Inversiones, Partler Participaciones, Partler 2006, or related entities.” This charge was made to Ortega’s real estate holding company for “provision of construction services.” Notably, this amount reflects an increase of €7 million compared to the previous year and €9 million from 2023 figures. Additionally, Ortega paid another €2 million to Inditex for other services.
Major Construction Projects
Despite being primarily a real estate entity, Pontegadea is not focused on construction work. Therefore, a significant portion of this bill is linked to Goa Invest’s projects developing seven comprehensive care centers for the elderly in Galicia. These centers are a commitment by Ortega to combat unwanted loneliness among older adults, with five of the centers already operational.
The Landlord of Zara
Interestingly, the €49 million paid to Inditex is earmarked for rent. This amount, which is €3 million more than last year, is used to pay for commercial premises owned by Pontegadea Inversiones and Partler. Together, these companies hold over 59% of Inditex’s capital. Furthermore, an additional million euros is paid to Rosp Corunna, the holding company owned by Ortega’s daughter, for rental services to Inditex brands.
A Drop in the Ocean
This €49 million constitutes merely 4.5% of the total rental expenditures of €1.085 billion that Inditex incurs annually. When viewed within the company’s broader financial context, these numbers appear modest.
Expanding Contributions to Society
The construction initiative for senior care began in 2019 when the Xunta de Galicia, alongside Flora Pérez Marcote (Ortega’s wife at that time), signed a collaboration agreement with an initial budget of €90 million, which has since expanded to €180 million. These seven facilities are set to integrate into the public elderly care network once operational.
Simultaneously, the Amancio Ortega Foundation is working to combat loneliness among seniors through technology. Their program, “Network Voices,” supports 26,000 elderly individuals daily, with an initial budget of €15 million funded entirely by the foundation.
A Modest Figure in Perspective
In the previous fiscal year, Inditex announced a record net profit of €6.220 billion, a 6% increase compared to the preceding year. Within this financial landscape, the €49 million received by Pontegadea seems quite trivial. Money may change hands, but it generally remains within the confines of Ortega’s family business ecosystem.