Zara owner Inditex is feeling the pinch

The owner of High Street fashion giant Zara today reported the sharpest fall in its quarterly profits for five years as the Europe-wide recession bit hard.

First-quarter after-tax profits at Inditex, which also runs Massimo Dutti in the UK, fell 16% to �184 million (£159 million) despite rising sales as it cut prices to keep shoppers spending.

However, with turnover of �2.34 billion, it was still selling more than US rival Gap.