The creation of the clothes retailer Zara has catapulted its founder, Amancio Ortega, into becoming the third wealthiest man in the world.
Zara opened its first doors in 1975 in A Coruna in northern Spain. Originally Ortega and his business partner Rosalia Mera wanted to call the shop Zorba after the film, but a bar down the street had already bagged the name, so they opted for Zara instead.
Zara’s growth eventually led to the creation of a company, Inditex, encompassing seven other brands including Massimo Dutti, Bershka, and Pull & Bear. Their global operations have lead to 6,500 shops in 88 countries.
Today it is the largest fashion retailer in the world.
But it is the business model which has set it apart and has changed the way the rag trade operates and what customers expect from a high street clothing provider.
Deliveries of new clothes are made to Zara shops twice a week, with new styles arriving four or five times in just one season. This keeps the customers on their toes, with repeat visits a must.
To keep up the pace, just over 50% of items are manufactured in what the company calls “proximity” markets - Spain, Portugal, Turkey and Morocco.
Another key to the company’s phenomenal success is the strong links among various staff teams.
Store managers dispatch orders twice a week, basing them both on sales data and anecdotal comments from customers. Because of their influence, they are well paid and can earn 100% of their salary in bonuses for hitting sales targets.
The order has been evaluated and processed by the commercial team which works in close harmony and proximity to Inditex’s in-house designers.
Together these teams watch trends and develop new styles for which only limited stock is initially manufactured to see if it will fly. Production is so rapid that when items are successful, more can be produced quickly.
As for Mr. Ortega, now 78, he still has lunch in the staff cafeteria every working day.
