Zara | Inditex (Spain)

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Zara is the best-known brand in the portfolio of Inditex, the Spanish fashion group which is now the world's biggest fashion retailer by both revenues and global presence. Despite the recent economic downturn, the group has continued to go from strength to strength, opening between 250 and 600 stores a year. Its key strength has long been the superb efficiency of its manufacturing and distribution system, able to deliver a succession of new designs into stores at a speed which initially left competitors stumbling. The group overtook European rival H&M by revenues at the beginning of 2006, and finally topped Gap in 2009. Inditex was already bigger than Gap by store numbers. By early 2017, the group's portfolio housed 7,292 outlets worldwide. Zara is by far the most widespread brand, accounting for almost a third of outlets and two-thirds of revenues. It is supported by a collection of other store concepts including Bershka, Massimo Dutti and Pull & Bear.

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Inditex website

Brands

Zara Zara Home
Bershka Massimo Dutti
Pull & Bear Stradivarius
Oysho

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 16th Mar 2017: Spanish fashion group Inditex reported another unbeatable set of results for its most recent year. Reported sales jumped by 12% - including a same-store lift of 10% - to E23.3bn. In 4Q alone sales rose by 16% (more than twice the rate achieved by rival H&M in an equivalent period). It said it experienced growth in all geographic regions and across all eight of its brands. Net profit was also up 10% to E3.2bn, and the group is now sitting on net cash reserves of over E6bn. As a result, it plans to raise its dividend to shareholders. Founder Amancio Ortega, who holds 60% of equity, will receive E1.26bn. In the current year, the group said it will accelerate a strategy of closing smaller outlets and replacing them with larger stores nearby.

Adbrands Weekly Update 22nd Sep 2016: No worries of a slowdown at Inditex, owner of Zara and Massimo Dutti. Like-for-like revenues jumped 11% to a little under E10.5bn for the six months to July, while profits were up 8% to almost E1.3bn. The group said performance since July has been even stronger, with sales in local currencies rising 13%.

Adbrands Weekly Update 16th Jun 2016: Zara parent Inditex avoided the headwinds affecting rivals such as Gap, H&M and Marks & Spencer, delivering another quarter of strong growth in both revenues and profits. In its 1Q to April, profits rose 6% on sales up 12% to E4.9bn. Both figures were above expectations, prompting a string of analysts to reiterate their admiration for the group's lean business model, even compared with closest rival H&M. "There are some deep structural differences separating the product, business model and likely future fortunes of these two fashion retailers," Societe Generale's Anne Critchlow told trade bible WWD. "We must prefer Inditex, today, tomorrow and well into the future."

Adbrands Weekly Update 10th Mar 2016: The Inditex juggernaut continues rolling on. Revenues for the owner of Zara, Massimo Dutti, Bershka and others, topped E20bn for the first time for the year to Jan 2016, at E20.9bn, an increase of over 15%. Net profits grew by the same margin to E2.9bn, even after significant investment in additional outlets and staff. The group opened 330 shops during the year to reach total of 7,013 outlets in 88 countries - Zara Honolulu was its 7,000th opening - and it now employs more than 152,000 staff.

Adbrands Weekly Update 17th Sep 2015: Zara parent Inditex felt few of the tremors now afflicting upscale retailers, or even its middle-market rival H&M. Helped by currencies, growth accelerated once more, with net earnings for the half jumping 26% to almost E1.2bn, while revenues rose 17% to E9.4bn. More than half the growth was contributed by new stores.


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Background

Free for all users | see full profile for current activities: Having trained as a tailor, Amancio Ortega Gaona set up his first textile manufacturing business, Confecciones Goa (his initials in reverse), in 1963 in partnership with his first wife, Rosalia Mera. They began producing lingerie and nightdresses for sale to local retailers in and around the town of A Coruna in Galicia, northern Spain. The range of garments steadily expanded and the Ortegas established their own retail outlet in 1975. This was originally to be named Zorba, after the film Zorba The Greek, but they changed the name to Zara to avoid confusion with A Coruna's local bar, already called Zorba. 

Over the next ten years, the chain gradually spread across the rest of the country. Industria de Diseno Textil (or Inditex for short) was created in 1985 as a holding company for what had by then become a network of different manufacturing and retail businesses. A year later the group began winding down its third-party manufacturing to concentrate on the Zara chain. At the time, it was considered to be a comparatively down-market brand by Spanish shoppers, but this attitude changed as the business established a presence in other countries. In 1988, Zara opened its first outlet outside Spain, in Portugal, followed by the US and France in 1989 and 1990. A series of other countries followed, initially one or two each year; then from 1998 onwards between four and eight every year. The first UK stores opened in 1998, the first in Germany in 1999; Italy in 2001.

In the mean time the group also diversified its offering by launching or acquiring alternative store formats. Pull & Bear was launched as the group's second retail brand in 1991, and Inditex also acquired a controlling stake in Spanish designer fashion label Massimo Dutti. (It bought out the outstanding shares five years later). The portfolio was swelled further with the launch of Bershka in 1998, and the purchase of Stradivarius in 1999. Inditex went public in 2001, the same year that Oysho launched. Zara Home was introduced two years later. Newest addition to the fold is Uterque, opened in 2008. Since 2001, the group has embarked on an ambitious store opening strategy, averaging an outlet a day. Ortega's long-time collaborator Jose Maria Castellano resigned towards the end of 2005, and was replaced as deputy chairman and CEO by Pablo Isla. See full profile for current activities


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