About the company
Zara is one of those success stories that has become an example in case studies to journalistic articles as to how a company can work efficiently and stay afloat in such a competitive market. The gist is in the unique strategies which help to attract and retain more and more customers and made it possible to differentiate from other competitors.
The very first Zara store was opened by Armancio Ortega in 1975 in La Coruna, Spain. The store featured low priced items lookalikes of those seen on the fashion runways. By the year 1989, there were 82 Zara stores in Spain, and Amancio Ortega commenced speeding internationally through Portugal, France and the United States. Inditex, Zaras parent company, continued growing and launched other clothing stores for different customer segments. In the 1980s the company put into practice a new design and distribution method that greatly lowered the time between design, production, and arrival at retail points of sale. The system was designed by Castellano who became the CEO of the company in 1984. In 1985, Industria de Diseno Textil S.A. or Inditex was created as a holding company for Zara and its production plants.
Nowadays, Inditex is a global specialty retailer that designs, produces, and sells not apparel, footwear, and accessories for women, men and children, but also home decorations, through its chains around the world. Zara is the largest and most internationalized of the retailers that Inditex owns: (Zara, Zara Home, Massimo Dutti, Pull & Bear, Bershka, Stradivarius, Uterque, Lefties and Oysho).
In its offered document, Inditex described Zara in this way:
Zara is a high-fashion concept offering apparel, footwear and accessories for women, men and children, from newborns to adults aged 45. Zara stores offer a compelling blend of fashion, quality and price offered in attractive stores in prime locations on premier commercial streets and in upscale shopping centers. Our in-house design and production capabilities enable us to offer fresh designs at our Zara stores twice a week throughout the year.
According to Inditex annual report from 2018, Zara, together with Zara Home accounts for approximately 18 billion EUR in net sales. Zara on its own operates 2,131 stores expanded in 96 markets and is available in 154 online markets. Over the past year, Zara has strengthened its commitment to sustainability, what is their due diligence being a fast fashion company, through over 90 million garments sold under the Join Life label. The new contemporary clothing line is made with forest friendly and animal friendly materials, such as organic cotton, recycled wool and Tencel, and for a garment to carry the Join Life trademark, it must meet specific criteria.
The ability to anticipate and react to our customers’ demands and offer them responsible fashion framed by a unique experience and relationship forms the basis of Inditex’s business model. Zara business models pillars are short cycle time, small orders per model, extremely wide variety of product each season and investment in information and communication technology. Zara is able to accomplish this huge variance due to ordering small batches and internal production of the most stylish, and therefore most time-sensitive items. More predictable styles are outsourced to manufacturers in Asia. The throughput time from beginning of the design phase to the arrival of the finished goods in the stores is 4 to 5 weeks for new items and 2 weeks for adjustments or changes to existing items.