How Zara Grew Into the World’s Largest Fashion Retailer

By SUZY HANSEN

Galicia, on the Atlantic coast of northern Spain, is the homeland of Generalissimo Francisco Franco, but is otherwise famous for being a place people try to leave. For much of the 20th century, hundreds of thousands of gallegos, as they are called, emigrated to countries as far away as Argentina to escape Galicia’s rural poverty. Today, however, even as Spain teeters on the edge of economic catastrophe, the Galician city La Coruña has attracted notice as the hometown of Amancio Ortega Gaona, the world’s third-richest man — he displaced Warren Buffett this year on the Bloomberg billionaire index — and the founder of a wildly successful fashion company, Inditex, more commonly known by its oldest and biggest brand, Zara.

Multimedia

Spain’s Inditex Spins Gold

Enlarge This Image

Pedro Guimarães for The New York Times

The complex in Arteixo, Spain, that houses Inditex headquarters and some Zara factories.

Readers’ Comments

Share your thoughts.

• Post a Comment »
• Read All Comments (40) »

Ortega has never given an interview, according to his communications department, nor does he attend award ceremonies or parties. He rarely allows his picture to be taken. Pablo Isla, who took over the company when the 76-year-old Ortega stepped down as chairman last year, rarely gives interviews or waves to the camera, either. In fact, the public face of Inditex is its soft-spoken communications director, Jesus Echevarría, who, as I discovered during a recent visit to the Inditex complex, is perhaps the only communications director on the planet who all but apologizes whenever he must answer questions about Inditex’s runaway success.

The company’s outward modesty reflects its surroundings. La Coruña is a quiet place, typically European in its humdrum perfection: tidy highways and compact cars, clean taxis, no need to worry about tipping. The week I visited in late July, the conservative national government was threatening to implement a new austerity plan, and unemployment among people under 30 in Spain hit 50 percent, but the city seemed calm. Restaurants were busy, beaches packed. People dozed on La Coruña’s seaside boulders, while their dogs leapt in the water. The city is a little more than 300 miles from Madrid and 555 miles from Barcelona. It’s an odd location for an aggressive, global company like Inditex.

The campus (located in the industrial area of Arteixo, next door to La Coruña) consists of corporate headquarters for the entire company, as well as headquarters for Zara and Zara Home, two of Inditex’s eight brands. There are also factories and a distribution center where clothes are loaded onto trucks to be sent around the world. The factories are directly across from the corporate offices. The main building, where I waited for my hosts, somewhat resembled a hospital waiting room, with rows of plain boxy black chairs and little else. Apart from a single poster of a fashion model, nothing adorned its white walls. No flowers, no words, no ads, no fashion magazines, no style. The setting felt appropriate for the age of austerity, even if Inditex is one company in Spain that is actually thriving.

Inditex is a pioneer among “fast fashion” companies, which essentially imitate the latest fashions and speed their cheaper versions into stores. Every one of Inditex’s brands — Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear and Uterqüe — follow the Zara template: trendy and decently made but inexpensive products sold in beautiful, high-end-looking stores. Zara’s prices are similar to those of the Gap: coats for $200, sweaters for $70, T-shirts for $30.

Inditex now makes 840 million garments a year and has around 5,900 stores in 85 countries, though that number is always changing because Inditex has in recent years opened more than a store a day, or about 500 stores a year. Right now there are around 4,400 stores in Europe, and almost 2,000 in Spain alone. Inditex’s main rivals are way behind. Arcadia Group, which owns Topshop, among others, has about 3,000 stores worldwide; H&M, based in Sweden, has 2,500 (when you include its smaller lines of stores); and Mango, based in Spain, 2,400.

In an Inditex conference room, Echevarría gave me a multimedia presentation about the company. The number of stores in different countries popped up on the screen — including 289 in China and 45 in the United States. Since the time of our meeting, in late July, Inditex has reached 350 stores in China and opened another in the United States. The company’s march appears to be as inexorable as the passage of the seasons. But can Inditex survive its own expansion?

“When we open a market, everyone asks, ‘How many stores will you open?’ ” he said. “Honestly, I didn’t know. It depends on the customer and how big the demand is. We must have the dialogue with the customers and learn from them. It’s not us saying you must have this. It’s you saying it


source: http://women-clothes-store.blogspot.com