Zara closes in on Gap

The Spanish fashion chain Zara has overtaken the American clothes retailer Gap as the world's largest retailer. A nine per cent increase in sales in the first quarter of the financial year, to €2.218bn (£1.7bn) saw Zara's parent company Inditex nudge past the US chain, which saw its revenues fall by 10 per cent to €2.169bn.

Gap has suffered as consumers cut spending, particularly in the US. Zara, meanwhile, has built its global expansion on the back of a customer base which favours fast turnaround fashion.

Gap yesterday restructured its London-based marketing team and European design departments in the face of a global consumer slowdown. Around 80 jobs could be lost in total.