2024-11-16 12:25:00
Fast fashion from Zara and Massimo Dutti
How the cheap brands from northern Spain are changing the fashion world
Not New York or Milan: The globally successful fashion group Inditex is based in Spain. Everything that stores in over 200 countries offer is created here. A visit.
The store at Inditex’s headquarters in Arteixo, northern Spain: Zara fashion is designed in the suburb of the Galician city of A Coruña.
Photo: Jesus Sancho (AP, Keystone)
- The Spanish fashion group Inditex’s sales have doubled since 2015 to 33.8 billion francs.
- Furthermore, all collections are designed at the headquarters in Arteixo, northern Spain.
- Despite fewer stores, overall sales space is increasing worldwide.
- Inditex plans to reduce CO₂ by 90 percent by 2040.
A normal afternoon on Madrid’s Calle de Serrano, number 23. There is a four-story store for the fashion brand Zara. Hundreds of customers examine, try on and buy skirts, blouses, jackets, sweaters and underwear. At the top, in the men’s department, a separate area advertises the special edition of an Italian star designer.
Things that obviously inspire. A bunch of customers ask about this or that piece that they can’t find, but the salesman regrets: “It went out in a flash this morning,” he explains to the disappointed men.
Welcome to the world of fast fashion. The world in which fashion is reinvented every day, in which what was in in the morning is out in the afternoon.
Welcome to the world of Zara.
Each piece is designed in Arteixo
Like hardly any other fashion label, Zara has defied the pandemic, inflation and the Chinese low-cost retailers that have recently brutally entered the market. While chains like H&M, Uniqlo and Primark are floundering, Zara’s parent company Inditex, which also owns brands like Bershka, Oysho and Massimo Dutti, has doubled sales since 2015 – to the equivalent of almost 33.8 billion francs per year. In the first half of this year alone it rose by a good seven percent. One seventh of the Spanish stock market index consists of Inditex.
This is also surprising because the success was not born in the fashion centers of New York, Paris or Milan, but on the very edge of continental Europe, in the northwestern Spanish region of Galicia.
It is the home of Amancio Ortega. The 88-year-old is the richest man in Spain and is among the richest top 15 worldwide.
There are only a few photos of Inditex founder Amancio Ortega. This picture shows him in 2012.
Photo: Keystone
Almost 50 years ago, Ortega opened the first Zara store in the coastal town of A Coruña; he had previously sold bathrobes, among other things. Today Zara operates more than 5,600 stores in 213 countries.
The headquarters of the Inditex Group is just a few kilometers from A Coruña, in the 33,000-inhabitant community of Arteixo.
The football field-sized low-rise buildings on the company premises are only separated from the Atlantic by a few hills. The building complex is connected above and below ground by a confusing network of corridors and glass bridges. In some places you pass through halls in which clothes racks, fabric samples, flat screens, photo spotlights and hundreds of people create an atmosphere of bustling activity.
Only 6,000 of Inditex’s approximately 160,000 employees work here at the headquarters. Most of them work in the stores of the various corporate brands.
But every piece they sell there is designed in Arteixo, ordered from suppliers, inspected and photographed for marketing. 700 designers are constantly working on new Zara designs, printing patterns on special paper that are immediately sewn together and tried on on mannequins.
The key? “Identify trends early”
Suddenly Óscar, that’s what they call him here, the CEO, appears. In 2021, Óscar García Maceiras was appointed Inditex’s new CEO, and shortly afterwards Marta Ortega, the company’s founder’s youngest daughter, took over as chairman of the supervisory board. Maceira’s personality amazed many in the industry. The now 49-year-old was a public prosecutor, then a banking lawyer, and Inditex is his first managerial position. But the numbers speak for him.
In fact, Maceiras is one of those people who instantly energizes a room. The right hand gestures, the left is in his trouser pocket. “Identifying trends early on,” he says, is a “key element of our business model,” plus diversification, new lines, new brands.
Since he came, the numbers have been rising sharply: Inditex boss Óscar García Maceiras.
Photo: Keystone
The ski fashion thing is also a novelty. He jovially talks about an internship in a Zara store that he had to complete like any company newcomer – in his case it was the store on Madrid’s Calle de Serrano. Then he has to go to a meeting with regional managers in Naples to “feel the real world,” not just numbers on screens.
Anyway, the numbers. At Inditex, they are no secret to top management. They shine on screens everywhere in the company headquarters, including where the designers are designing the next collections. Every store manager gets to see them. Like stock market values, they show current sales in the 213 countries where Zara is located, from Canada to Cambodia.
Stores bring in 75 percent of sales
In fact, the stores are Zara’s most important sales engine, even in digital times.
Three quarters of sales are generated with them, despite the 150 million app users that Inditex proudly points to. But a lot is happening here too: Since 2018, Zara has reduced the number of stores worldwide from 7,500 to just over 5,600.
What sounds like a consolidation is actually an expansion because the individual businesses are getting bigger. Measured in square meters, Zara’s global sales area is larger than ever before. Fresh produce comes into the stores twice a week. No item of clothing is ever reissued, no matter how successful it was. This gives customers the feeling that they have to access things quickly. In fact, at Zara comparatively few products are sold at discount prices.
Inditex also has production in Asia
It only takes three to four weeks from the design in Arteixo to the display in the stores; nine to twelve months are normal in the industry. In order to stay on trend, the production of newly designed pieces is postponed until the last minute. Sometimes models are produced uncolored and matched to the current trend color at the last minute.
In order to link the store worlds with the digital universe, the goods are provided with RFID chips in the price tag. Soon there will even be soft chips woven into the brand label. With the technology you can not only see in Arteixo what people in Phnom Penh like at the moment, delivery flows can also be adjusted immediately and certain models can be sent to where they meet customer tastes. Logistics at the limit.
This raises questions about sustainability. Inditex likes to emphasize the geographical proximity of its manufacturing plants in Portugal and Morocco, from which the goods can be brought by ship and truck to the logistics centers on the Iberian Peninsula.
But just a look at the labels in the store in Madrid shows that this is only part of the truth: many pieces are made in China, some in Bangladesh. Many fabrics are made of acrylic and polyester. And both the global spread of the brand and Zara’s last-minute production policy make air freight part of the well-oiled machine.
After all, there is a sustainability officer at the company headquarters. Luis Coloma presents ambitious goals: By 2040, Inditex wants to reduce its CO₂ footprint by “at least 90 percent compared to 2018”. In addition, 40 percent of clothing items should be made from recycled fibers in a few years. In order to maintain social sustainability, Inditex requires every supplier to comply with compliance rules. The sweatshop scandals in Bangladesh have had an impact on the industry.
But the biggest risk in this business cannot be eliminated with technology or sustainability goals: the “fashion risk”. The risk that not only individual items of clothing will fail customers, but that the entire brand will lose its image.
That’s one of the reasons why branch managers from all over the world report to Arteixo every morning on how things went the previous day. “A lot of money is constantly being turned over in this business, you can win a lot and, if things go badly, you can quickly burn a lot,” says an Inditex manager. So far, Zara seems to have the nose, and that is the miracle of this global company: that it recognizes and serves the fashion trends of the entire globe from Arteixo.
Two weeks later there is no sign of the Italian designer on Madrid’s Calle de Serrano. The edition of a fashion designer from Budapest is now being advertised. Her pants also have a wide flare. But, who knows, this trend could be out again tomorrow.
Economy today
Get the most important news from the economy as well as the best background information and analysis.
More newsletters
Found an error? Report now.
1731836252
#Zara #Massimo #Dutti #Spanish #cheap #brands #turning #fashion #world
How is Zara addressing the challenges of sustainability while managing fast inventory turnover?
Ms to be successfully navigating these challenges. The focus on rapid turnover, both in terms of inventory and trends, allows the brand to maintain relevance in a fickle market. By prioritizing immediate feedback from global store managers and leveraging advanced logistics, they can adapt quickly to changing consumer preferences.
This strategy, while beneficial for market responsiveness, raises ongoing concerns about sustainability. Although Inditex presents ambitious eco-friendly goals and emphasizes its relatively short supply chains in Europe, the reality of global manufacturing means that significant portions of their products still originate from far-off countries like China and Bangladesh. The environmental impact of air freight and the use of synthetic materials complicates their sustainability narrative.
Additionally, the fashion industry is inherently risky; public opinion can shift quickly, and a single misstep could tarnish a brand’s image. Zara’s ability to mitigate this risk relies on its close monitoring of sales data and trends across 213 countries. This data-driven approach is complemented by their agile production model, leaving little room for outdated inventory.
As Inditex continues to evolve, it faces the dual challenge of maintaining its growth trajectory while addressing the pressing need for sustainability in an industry often criticized for its environmental footprint. Balancing profit with responsible practices will be crucial for Zara and its parent company as they navigate the future of fashion.
