Zooming In On Zara: Zara’s White and Black Sides

If there is one brand known around the world as one of the best fashion retailers for the general public, it is Zara. The Spanish clothing brand was founded by Amancio Ortega and Rosalia Mera (died in 2013) and is currently headquarters in Arexio, Galicia in Spain. With over 2000 store locations worldwide, it is undoubtedly one of the strongest international retailers one can find. It is the flagship chain store of the Inditex group that also owns Zara Home, Oysho, Stradivarius, Bershka, Massimo Dutti, Pull & Bear and Uterqüe.

Zooming In On Zara: Zara's White and Black Sides

Zara is and always will be one of our favourite stores. It always seems to have something new on the racks, always some grand display with different colors and alluring pieces. It has always been that one stop shop the girls love to hang out in. Instead of spending boatloads of money on advertising, it is said that Zara focuses on opening new stores instead. I can believe that, of course, but a good amount is also spent in advertising in every country it enters. That is quite a lot of countries in any case. And while it resisted transferring fast fashion to low-cost countries, thus cutting down on labour costs, I can state that we have always found most of the pieces to be not from Europe. Still, even today almost 50% of Zara’s goodies are manufactured in Spain.

By the end of 2014, Zara was announced to have had a turnover of 963 million euros, incredible numbers for an incredible retailer. Even Zara’s warehouse is 9 times the size of Amazon’s occupying around 5 million square feet space! But Zara’s origins are much humbler, opened up initially in 1975 in the small town of A Coru‚Äö√†√∂¬¨¬±a in Spain and named Zorba after Ortega had watched the Zorba the Greek film. Since there was a bar down the street with the same name, the letters were scrambled and the name “Zara’ came about in a random combination. Since there might have been more than one set of letters for the sign, it kind of makes sense that there are two A’s. What made the Zara store so popular was the fact that knock-offs the original high-end clothing fashions were being sold at a fraction of the price. Over time, this turned into multiple stores round Spain and then slowly began to enter markets outside the country’s borders. Instant fashion became a thing and everything that reached the stores would quickly be turned into a more affordable version soon enough (Zara product prices surely differ in different countries and, of course, it’s cheapest of all in Spain, while in some countries like Russia the same piece may retail for double the Spanish price). The company turned to groups of designers to make the process all the faster, while the developing technologies of the time aided Ortega immensely. Its international expansion took Zara to Portugal first, in Porto during the year 1980, while a mere nine years later it would arrive in the United States. Funny enough, the French expansion came in 1990, followed by Mexico in 1992, Greece, Belgium and Sweden in 1994 and then on forwards to over 90 countries.

The Zara stores are normally located in shopping malls and along the most well-known fashion streets in each country they enter, while the flagship locations are normally the best located and most expensive of real estate. This includes 666 Fifth Avenue in New York (the brand paid around $324 million to obtain a space for its store there), Oxford Street in London, Calle Serrano in Madrid, Via del Corso in Rome, Champs Elysees in Paris, Nevsky Prospekt in Saint Petersburg, Myeongdong in Seoul, and such others all over the world. The most number of Zara stores can be found in Spain, as expected, while second comes China! This is followed by France, Italy, Japan, Russia, Portugal, Germany, United Kingdom, Brazil, United States, Poland, Greece, South Korea, Turkey, Saudi Arabia, Belgium, Canada, Netherlands, Israel, Romania, Switzerland, India, Austria, Indonesia, Australia, Columbia, Hong Kong, United Arab Emirates, Argentina, Venezuela, Thailand, and Sweden, all in that order, each with 10 stores or more within the country. Of course, there are fewer shops open in other countries. Many of the countries have their own online store retailer options as well, meaning that you can shop Zara from the convenience of your home, no matter where you are.

Just 3 days ago, we heard the news that Zara is the first apparel brand to cross the 100 million USD thresholds in profits in India! It appears that even those in the southern nation enjoy the beauty of a good Zara piece. Though, we have to wonder what all this discrimination against employees’ accusation is about. It is one the coolest brands out there and it seems to have been hit with some hot water as it appears there is some form of bias against homosexuality and differing religions (you remember those Zara swastika handbags and the striped children’s shirt featuring a yellow heart on the front that so much resembled the Holocaust concentration camp uniform?), though how that is possible when there are so many shops in Israel, we are unsure. In any case, the bigger you get, the more scrutiny you are placed under, something that those running the show behind the Zara brand know about very well.

Speaking of those running Zara, it appears that Amancio Ortega, who has never given an interview so far, is indeed the world’s fourth richest man in the world at the moment in 2015, eventually coming after Warren Buffet, while the brand itself is at number 58 in Forbes’ list of most valuable brands with the value of $9.4 billion! That is an incredible feat for having come from such a small company. Considering the fact that profits jumped by a whopping 28% during the first quarter, with sales rising by 14%, we have to admit that we should have expected that bit of news. Zara is huge in the world today and it is only growing bigger, the future looking especially bright. There are hundreds of new stores opening, with many of them in Taiwan, Hong Kong, and Macau, while also expanding in the United States, but we have to wonder at how much bigger it can get. What happens when the world is conquered in this game of Risk? Who do you end up “attacking’ when you have already conquered all the countries, all the major cities, etc.?

But what is it that makes Zara so successful where Gap, Abercrombie, & Fitch, American Eagle, and so many others are struggling? Even celebrities, models and royals wear Zara, including Kate Middleton, Kim Kardashian, Diane Kruger, Pippa Middleton, Katie Holmes, Selena Gomez and many others. Remember that Zara skort craze, when everyone was hurrying to get that sexy little piece? Zara’s success is the result of a strategy that involves not trying to predict fashions 12 months in advance but producing pieces quickly, updating often and keeping very little in stock so that there are fewer markdowns and a lot fewer wounds to lick if there is a fashion miss. While producing around 12,000 new designs each year, Zara has a tendency to restock twice a week with new pieces, which officially makes it the strongest competitor to every retailer out there. For shoppers, this makes decisions easier to make because they will buy quickly to prevent it from selling out, while it will keep them occupied with newer designs every time they come in. And why not capitalize on that? People these days like novelty, they like quick change and they love a good bargain. Zara has a tendency to provide them with all that and more!

Photo courtesy of FotoMaps

Written by Tamar Najarian
Tamar is a psychologist, teaching and heading into the business world with a prospective MBA. A silly lover of books and words, she generally loves to seek out new adventures, getting her toes wet and her hands dirty. Having moved to Armenia nearly two years ago, she feels like the world is at her fingertips and anything is possible so long as you take a step in that direction.