Spanish fashion titan Inditex marked its second year in Ireland with annual sales of more than €40 million at the Zara chain and its sister brands Bershka and Massimo Dutti, new filings reveal

Profits were down but the latest accounts for the rapidly-expanding business show that Inditex took a maiden dividend of €2.8 million from Zara in mid-2005, only 20 months after it entered the Irish market.

The group now has a total of 22 Irish stores and it plans to open more outlets.

"We're happy with the way the business is growing in Ireland. The brands have been well received. We're continuing to look for other opportunities," said Mike Shearwood, managing director for Ireland and Britain.

Like its Swedish rival H&M, Inditex employs a "fast-fashion" business model under which it can bring new lines to market within a fortnight. The mass market chain Zara is the best known of the brands in its portfolio, which occupy different points on the pricing spectrum.

New accounts for Za Clothing Ireland, which runs the Zara business, show that its sales grew to €31.13 million in the year to January from €17.52 million in the previous year. This reflects strong like-for-like growth at three existing stores and the addition of a new outlet in March 2005 at Dundrum Town Centre, in south Dublin, and a Limerick store in November 2005. Zara set up in Ireland in November 2003 with a store on Henry Street, Dublin.

Inditex took a dividend of €2.8 million from the business in July 2005, the accounts show. The group opened a sixth Zara store this year at Newbridge, Co Kildare, and plans to open a seventh at South King Street, Dublin. But while gross profit at Za Clothing Ireland rose to €17.35 million from €7.58 million, operating profits fell back to €2.31 million from €2.76 million, while pretax profit fell to €2.06 million from €2.76 million.

The group made no formal comment on the reduction in profitability, but higher selling and distribution costs are believed to reflect the impact of increased "royalty payments" to other Inditex subsidiaries.

The accounts for Massimo Dutti Ireland, a designer-led chain which occupies a higher point on the price spectrum, suggest that the chain's first store, in Dundrum Town Centre, made rapid inroads. After its opening in March 2005, this store took in sales of €3.3 million in its first 11 months, making an operating profit of €620,908 and pretax profits of €608,596.

The accounts for Bershka Ireland, which is geared at a younger market, show similar growth in the year to January. Introduced in the Irish market during the financial year, Bershka's three Dublin stores and its outlet in Cork built up sales of €6.03 million.

An operating loss of €738,571 at Bershka is believed to reflect the impact of start-up costs and "royalty payments" to the parent group.

No accounts have been filed yet for the other Inditex brands in Ireland - Pull & Bear and Stradivarius.