BEHIND THE BRAND : ZARA July 18, 2017 – Posted in: Fashion, Lifestyle
Welcome to our new series called Behind the Brand. We’re digging up companies from around the world and in this edition we unravel Zara.
Zara was founded in 1975 by Amancio Ortega and his ex-wife Rosalía Mera in La Coruna, Spain. But the history of the company goes back much further. It began precisely in the year 1950 when a fourteen year old, Amancio started his first job as an errand boy. He was rummaging the city lanes delivering fabrics to vendors and by 1960 was promoted to a senior manager position. Bolstered by his experience, he started creating his own designs. In 1963, Amancio started Confecciones Goa with his wife, brother and sister to supply lingerie and gowns to retail houses. The people loved it. The newly found company would become a top supplier for the next decade. Until…
Until 1975, when Amancio decided to open his own store in La Coruna. He named it ZORBA after his favorite movie – Zorba, The Greek – only to find out that a couple of blocks down the street, there ran a bar with the same name. Either out of thrift or haste, Amancio, not willing to waste those printed moulds, renamed his store to ZARA.
Viola! Thus, began the legendary tale of this small town retail store which is now the world’s largest retail company. Over the next decade, Zara expanded rapidly in Spain, making inroads into the fashion world. The idea was simple – Sell high end fashion at affordable pricing. Zara turned the traditional fashion marketing model on its head. Traditionally, companies market a single season collection and launch it. There’s fashion shows, advertisements and endorsements to display their designs in pursuit of your money and at the end of the season, clothes get heavily discounted to attract sales in pursuit of, yes, your money. .But Zara would do none of that.
Zara started launching collections so rapidly that it made other brands look stale. Fresh designs went from paper to store in less than 2 weeks. If rival companies launched 4, Zara had over 20 collections annually. That’s more than 1 new collection every month!!
Plus to add to this crazy idea, they ran short production runs. Meaning they didn’t have leftover stocks, thus there grew no need for discounts.
So guess what all that did? That ingenious idea helped build an empire. A new entity was born called Fast Fashion. Millions of customers would walk in knowing that every week, there would be something new and if they didn’t hurry, they’d miss it.
In 1988, Amancio opened his first international store in Porto, Portugal. Today, there are over 2000 Zara stores worldwide. To further expand his Zara empire, Amancio founded Industria de Diseño Textil aka Inditex which is now the biggest fashion group in the world. Inditex operates over 7,200 stores in 93 markets worldwide and owns brands such as Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe.
Inditex became a public company in 2001 making Amancio Ortega the world’s richest man. When the news reached the masses, interest grew over this self-made billionaire. But Amancio is like the Batman. He’s incognito. There weren’t even photos of him accessible to the media till 1999. No interviews either! He is known to prefer a quiet, reclusive life.
Zara has been credited for ushering revolutionary fashion waves. The company does not spend on advertisements or fashion shows. Instead, it invests heavily on purchasing the best and most expensive locations in a city to open their store. They rely on their fast fashion model to bring in the moolah. Works so damn well that several companies (ASOS, Topman, Walmart, Forever21 etc.) have taken up fast fashion.
However, all has not been rosy for the Spanish powerhouse. Zara has been accused of stealing designs from top designers to indie designers. It has been caught making only minor adjustments to someone else’s design and selling them. With the advent of fast fashion, Zara has drawn much criticism for creating unsustainable, environment threatening practises.
Will the empire continue to dominate the clothing industry? Can fast fashion feed the hunger of its customer or will it eventually lead to a detrimental end? Only time will tell. As of today, Zara & its parent company, Inditex, show no signs of slowing down.
Hope you enjoyed this series. Please comment below with your suggestions for brands that you would like to read about.