Autorin: Yvonne Heinen-FoudehSpanish retail fashion giant Inditex, owner of the Zara fashion brand furthermore Bershka, Massimo Dutti, Oysho, Pull & Bear, Stradivarius, Uterqüe, then Lefties (nomen est omen) is the clear winner in the fast fashion space – globally. Acting smart and fast with a fully integrated business model from digital 2D/3D design/product development over manufacturing using state of the art automation solutions and intelligent logistics to customer-centric distribution in a worldwide retail network of own stores to make the backbone of that extra-ordinary success story. The real distinguishing features between Inditex and everything that comes under the heading of ”Profit before People & Planet” lies somewhere else entirely.
As one major differentiator to its fast fashion competition Industria de Diseño Textil, S.A. better known as Inditex, at least for its core brand Zara drives a value rather than revenue-based business model: Diminishing the risk that clothes are no longer fashionable by the time they reach the POS gets achieved through stunning 3 to 5 week design-to-delivery cycles and this for around 50% of all products and a cycle of 10 to 12 weeks for an additional 15% of product for all their various brands.
Fighting mark downs
street for retail property in Europe. Photo ©yh-f
How so? By view behind the curtains and subsequent analysis realistically, the manufacturing/sourcing share from Spain – where sophisticated fashionable quick-production are still partly produced at homemade workshops until today – from Portugal, Morocco and rather fast Turkey in combination with a high (estimated 50 – 60%) of own, fully controlled production play an important role here. A strategy coming for a price: An average additional sourcing costs of a good 40% – especially compared to purchasing in China – appear to be a realistic here.
And yet – the math works: At the end of the day Inditex has that fast fashion proposition, certainly thanks to unique, continuous trend scouting [let’s never forget – bottom line it’s all about product plus Inditex refrains any kind of 3rdparty advertising] – its agile supply chain, which provides it with pricing power and – these days honest sustainable competitive advantage.
The reasoning for the organization’s worldwide ongoing and exemplary leadership in the fashion market certainly is multi-fold. In a nutshell key aspects are the creativity of the teams and the strong execution of the fully integrated stores counting 7,200 worldwide by the end of fiscal year 2024. (The majority of the group’s stores are corporate-owned. Franchises are mainly conceded in countries where corporate properties cannot be foreign-owned.) Inditex’ stationary retail runs in conjunction with a powerful, equally globally positioned e-commerce business model: Zara only exhibits an international footprint in 98 physical markets and 214 online markets as of 2025. With that lead brand maintains a highly efficient dialogue with customers throughout the world while remaining focused on offering a seamless shopping experience, blending physical stores and an integrated online platform to meet customers wherever they are.
This is another strong asset to systematically prevent “red pencil actions”: What appears to be a bum in one marketplace may well turn out to be a hot sell in another. Apart from the fact that the fitting challenges from the early years of international sales had been entirely solved: Market-adapted pattern development addresses different body measurements of customers in different regions.
What started 50 years ago
around this time of the year or more precisely in 1963 with a small clothing business established by the now 88-year-old and still active Amancio Ortega, has today become the most valuable fashion company. Inditex is setting the course with the idea of fashion for millions. And that, pronto. In that respect we should recognize:
What by today became a 38.6 bn € business without doubt is getting ready for a life far beyond the indeed questionable fast fashion – fast money concept. The shift at the top of the organization over the transition period from a family (only) driven business with the IPO in 2000/2001 and ongoing globalization, providing readiness for worldwide e-commerce certainly having marked a challenging period. With the leadership team in place by today the time table of action taken hereby talks legend on where the journey may go.
Outlook 2025: massive investment in technological integration
€1.8 billion euros are planned to be invested in current business year, particularly in the further technological integration of the entire retail organization. The logistics expansion will continue with an annual investment of € 900 million euros.
The start to 2025 was positive: “Our spring/summer collections are being well received, with sales rising by 4% in February and March.” Sales rose by 4% in the period from February to April“, explained CEO Oscar García Maceiras at the AGM back in March. Despite economic uncertainties, Inditex anticipates stable gross profit and expects a small exchange rate effect of minus 1 percent on sales.
to be continued…
Historical: It all began with a single shop
Today the group runs a total 7.200 stores in 93 markets worldwide.
Let’s start off back at the beginning: After having been active in the textile sector since 1963, Amancio Ortega founded the textile company Zara in May 1975 (the year actually when Franco’s dictatorship in Spain came to an end) with the opening of a first store in A Coruña. In 1985, the by then 40 years young entrepreneur merged his textile activities under the name Inditex. Today the Industria de Diseno Textil S.A, thus the name of the company’s registered legal entity, is one of the largest textile companies in the world. Venue for the giant’s headquarter: Arteixo, a suburb of A Coruña in Galicia province in the North of Spain.
