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Zara
Type Public
Founded A Coruña, Spain (1975)
Founder(s) Amancio Ortega
Headquarters A Coruña, Spain
Area served Worldwide
Industry Fashion
Products Clothing
Revenue 6.824 billion (2008)
Parent Inditex
Website www.zara.com

Zara is the flagship chain store of Inditex Group owned by Spanish tycoon Amancio Ortega, who also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterqüe, Stradivarius and Bershka. The group is headquartered in A Coruña, Galicia, Spain, where the first Zara store opened in 1975. It is claimed that Zara needs just two weeks[1] to develop a new product and get it to stores, compared with a six-month industry average, and launches around 10,000 new designs each year. Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising; the company preferred to invest a percentage of revenues in opening new stores instead.

Zara was described by Louis Vuitton fashion director Daniel Piette as "possibly the most innovative and devastating retailer in the world." Zara has also been described as a "Spanish success story" by CNN.[2]

Contents

Company history

The founder of Zara, Amancio Ortega, opened the first Zara store in 1975 in a central street in La Coruña.[3]

Its first store featured low-priced lookalike products of popular, higher-end clothing fashions. The store proved to be a success, and Ortega started opening more Zara stores in Spain. During the 1980s, Ortega started changing the design, manufacturing and distribution process to reduce lead times and react to new trends in a quicker way, in what he called "instant fashions". The company based its improvements in the use of information technologies and using groups of designers instead of individuals.[4]

In 1988, the company started its international expansion through Porto, Portugal. In 1989 they entered the United States and in 1990 France.

This international expansion was increased in the 1990s, with Mexico (1992), Greece (1993), Belgium and Sweden (1994), etc. until the current presence in over 73 countries.

Zara stores are company-owned, except where local legislation forbids foreigner-owned businesses. In those cases, Zara franchises the stores.

Zara's products

As of 2007 Zara stores have men's clothing and women's clothing, each of these subdivided in Lower Garment, Upper Garment, Shoes, Cosmetics and Complements, as well as children's clothing (Zara Kids). Currently their sizing on women's clothing goes to a US size 12 or a UK size 16 or extra large.[5]

Manufacturing and distribution

The men's department of a typical Zara store. Almere, The Netherlands.

Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls most of the steps on the supply-chain: It designs, produces, and distributes itself[6].

Regarding the design strategy, an article in Businessworld magazine[7] describes it as follows: "Zara was a fashion imitator. It focused its attention on understanding the fashion items that its customers wanted and then delivering them, rather than on promoting predicted season's trends via fashion shows and similar channels of influence, which the fashion industry traditionally used."

50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24% in Asian and African countries and the rest of the world.[8] So while some competitors outsource all production to Asia, Zara makes its most fashionable items -- half of all its merchandise -- at a dozen company-owned factories in Spain and Portugal, particularly in Galicia and northern Portugal where labour is cheaper than most of Western Europe. Clothes with a longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly in Asia and Turkey.[9]

Zara can offer considerably more products than similar companies. It produces about 11,000 distinct items annually compared with 2,000 to 4,000 items for its key competitors. The company can design a new product and have finished goods in its stores in four to five weeks; it can modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences.[10] If a design doesn't sell well within a week, it is withdrawn from shops, further orders are canceled and a new design is pursued. No design stays on the shop floor for more than four weeks, which encourages Zara fans to make repeat visits. An average high-street store in Spain expects customers to visit three times a year. That goes up to 17 times for Zara.[11]

Stores

December 31st 2009 [2]

Gallery

Environment Policy

Zara is committed to protecting the environment through its corporate responsibility policy. Zara pursues initiatives at store and product manufacturing level, and in customer services.

  • Store level initiative include eco-efficient stores, energy saving and waste management.
  • Product Manufacturing includes ecological fabrics and organic cotton.
  • Customer services include biodegradable plastic and PEFC-certified paper bags.

External links

References

  1. ^ Zara: Taking the Lead in Fast-Fashion, BusinessWeek, 4 April 2006
  2. ^ Zara, a Spanish success story, CNN, 15 June 2001
  3. ^ Inditex timeline, Inditex Group, 2007
  4. ^ Inditex eNotes overview
  5. ^ Zara website
  6. ^ Zara, a Spanish success story CNN June 15 2001
  7. ^ Zara: Spanish season Businessworld India
  8. ^ Zara Fashion JTATM - North Carolina State University
  9. ^ Fashion Conquistador Businesweek
  10. ^ [1] Executive Masters in International Logistics at Georgia Tech
  11. ^ The Reign of Spain, The Guardian, 28 October 2003
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