Mass fashion

In the spin-filled world of retail, cheap has often been a byword for nasty. Cheap fashion; even nastier. Wear it once, wash it once and add it to your collection of tea-towels. For years, fashion houses have made fortunes by charging ransom prices for the privilege of wearing their over-hyped creations and for years little other option existed. The choice was quite simple. Blow a week´s pay, a sport shirt with sleeves marooned awkwardly between the elbow and wrist.

This is no longer the case. The emergence and proliferation of affordable fashion retailers has made fashion accessible to the masses. The undisputed heavyweight champion of this division in global turnover, outstripping rivals such as Sweden's H&M, the UK's Top Shop and Spain's Mango,  is Zara. It's the golden child of Amancio Ortega's Inditex group, which includes Kiddy´s Class, Pull and Bear, Massimo Dutti, Bershka, Stradivarius and Oysho.

Ortega opened his first Zara in A Coruña, Galicia, in 1975 and today this giant of retailing is present in over 63 countries with about a thousand stores. The chain posted an impressive €5,35 billion in revenue last year, accounting for 65 percent of the combined might of the Inditex group.

As a result, Ortega has become staggeringly rich. He is now the world's eighth richest man, boasting a personal fortune of €17,6 billion, according to Forbes magazine. Not bad for the son of a railway worker who left school at 14 to work as an errand boy for a local tailor.

Despite his success, Ortega remains one of the world's most reclusive corporate giants. With the exception of a shot published in the company's first Annual Report in 1999, there are practically no photographs of the Inditex boss, and to this day he continues to live a quiet life in a discreet apartment complex in the centre of A Coruña.

Far from exhibiting the excessive trappings of new-found wealth, Ortega has remained down-to-earth in nature. He refuses to wear a tie, is most comfortable in blue jeans and is reportedly still actively involved in design and production. In 2001, when Inditex shares first went public, suddenly crowning him as Spain's richest man, it was work as usual for Ortega who is said to have stopped briefly to watch the news that he had just earned €4.4 billion before eating lunch in the company cafeteria.

The keys to Zara's commercial success are many, but its ability to mimic, reproduce and indeed create the latest fashion trends and then deliver these quickly to market at accessible prices is fundamental to it staggering turnover and huge popularity. The time between Zara's 200-strong in-house design team sketching up new lines and these items hitting the shop floor can be as little as two weeks. Using a vertically integrated business model, which combines design, production, logistics and sales, new fashion items are a weekly phenomenon, eliminating the traditional four seasons of the fashion year and driving more consistent and regular purchases throughout the year.

¨Clothes are dispatched to each store at least twice a week, always including new models,¨ said a spokesperson from Inditex who asked not to be named. ¨This frequency allows a continual renewal of our fashion offer.¨

Speed of production is supported by a quick turnover of fashion lines, attaching an element of urgency and exclusivity to items that may or may not still be available the following week. This regularity of supply and turnover, the cornerstones of Zara's competitive edge, would be inconceivable were it not for the fact that a significant proportion of both production and sourcing remains in Europe. While many rivals have chased the lure of low manufacturing costs and currency values in developing countries such as China and India to boost profits, Zara to date retains 64 percent of its manufacturing and sourcing in Europe.

Another difference is Zara's approach to advertising. Namely, Zara doesn't advertise. At least not traditionally. Methods such as television, magazine and online advertising are not used but the Zara spokesperson said great attention is paid to the design of each store.

A brief stroll down the Portal de l'Angel is testament to this and shows that the philosophy of retail saturation in key inner-city locations applies not only to Zara but to all members of the Inditex family. This 150-metre strip of prime central city retail space boasts no fewer than two Zaras, two Massimo Duttis, one Pull and Bear, an Oysho and a Stradivarius all but guaranteeing that if the retail euro isn't captured in one of the group's stores it is likely to be spent in another.

While the company boasts an impressive website with images of their latest collection, the core focus remains on getting people through their many doors, and Inditex brands are not sold online. So far, these innovative retail strategies have proven hugely successful. With each staggering set of financial results, however, comes an increased expectation from shareholders for more of the same. To achieve this, the group's expansion continues unabated. While Europe is clearly Zara's bread and butter, its Asian-Pacific growth phase is expected to double the number of world-wide stores in the coming years, a prospect that should please shareholders.

With its recent launch into China (Zara opened its first store in mainland China in Shanghai last year and Beijing in February of 2007) the foundations for truly global expansion and domination would appear to be in place. Successful expansion into markets such as the US and Asia with even the most successful domestic brands, however, is notoriously difficult. Add to this cultural differences and varying fashion wants and tastes and the question remains whether Zara can achieve the same phenomenal success abroad as it has at home.

Time will be the judge but the future looks bright indeed for both Zara and its reclusive billionaire founder Amancio Ortega. His recipe of affordable chic has turned the tables on the fashion industry where style and accessibility rather than quality and brand are the new priorities. This is certainly the view of Susanna Molina, who was wandering the aisles of a central Barcelona Zara on a recent afternoon. ¨Although the quality can be a little bit average sometimes, I often don't want to spend too much money for an item I know next year I won't wear again.¨

Her one complaint was that she ends up shopping at Zara a little too frequently. Based on recent financial figures, it would appear she is far from being the only one.

Inditex Stores

Most shoppers are familiar with the ubiquitous Zara clothes shops. But what about the other Inditex stores–what, and whom are they all for?

Bershka: Bright, brash, bold. Inditex's teen emporium features both the latest fashion basics and more daring catwalk styles. Although you don't have to be under 18 to shop here, it helps.

Kiddy's Class: AKA Skhuaban for reasons best known to itself. It sells, as one might expect, ¨junior fashion¨, which includes fragrances, small accessories (presumably not for the under-threes) and, rather worryingly, cosmetics. Got to start them early.

Massimo Dutti: Opened as a shop for men's clothing, in 1985, moving 10 years later into the female market. Has a smarter range in more toned-down colours than other Inditex stores. Despite the Italian name, it is 100 percent Spanish.

Oysho: One of the newest members of the group,selling lingerie, nightwear and underwear basics, with both cartoonish and sophisticated designs to ensure a wide appeal. The name comes from a logo designed to be readable from almost any angle.

Pull and Bear: Started in 1991 as a menswear chain, and spent the next decade expanding in various European countries including Malta and Portugal. Its first womenswear collection was created in 1998. The focus is definitely towards the casual.

Stradiviarius: The shop's name may confuse consumers, but it doesn't have violins for sale, instead it offers a clothes range similar to that of Zara. It began in the mid-Nineties as a family-run womenswear company; Inditex took it over in 1999.

Zara Home: Spin-off from the clothes shops that uses a similar look to sell items for the home, and Inditex's first foray into non-fashion retailing. Products are mainly cheap and cheerful, and while the range isn't as wide as the clothes, it can be a good Ikea alternative.

First published July 2007