in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex

group, The world's largest apparel retailer, the fashion group also owns brands such as

Massimo Dutti, Pull and Bear, Uterqüe, Stradivarius and Bershka.

It is claimed that Zara needs just two weeks to develop a new product and get it to stores,

compared to the six-month industry average, and launches around 10,000 new designs each

year. Zara has resisted the industry-wide trend towards transferring fast fashion production

to low-cost countries. Perhaps its most unusual strategy was its policy of zero advertising;

the company preferred to invest a percentage of revenues in opening new stores instead.

This has increased the idea of Zara as a "fashion imitator" company and low cost products. Lack

of advertisement is also in contrast to direct competitors such as Uniqlo and United Colors

of Benetton. Zara was described by Louis Vuitton Fashion

Director Daniel Piette as "possibly the most innovative and devastating retailer in the

world." Zara has also been described as a "Spanish success story" by CNN.

Origins and history Amancio Ortega opened the first Zara store

in 1975 in a central street in downtown La Coruña, Galicia, Spain. Ortega named his

store Zorba after watching the classic film Zorba the Greek, but apparently there was

a bar that was called the same, Zorba, two blocks away, and the owner of the bar came

and said, "this is going to confuse things to have two Zorbas." They had already made

the molds for the letters in the sign, so they just rearranged them to see what they

could find, and they found Zara. The first store featured low-priced lookalike products

of popular, higher-end clothing fashions. The store proved to be a success, and Ortega

began opening more Zara stores throughout Spain. During the 1980s, Ortega started changing

the design, manufacturing, and distribution process to reduce lead times and react to

new trends in a quicker way, in what he called "instant fashions". The company based its

improvements in the use of information technologies and using groups of designers instead of individuals.

In 1980, the company started its international expansion through Porto, Portugal. In 1989

it entered the United States, and in 1990, France.

This international expansion was increased in the 1990s, with Mexico, Greece, Belgium

and Sweden, etc. until reaching its current presence in over 73 countries.

Zara stores are company-owned, except where local legislation forbids foreigner-owned

businesses; In those cases, Zara franchises the stores.

Products As of 2007, Zara stores have men's clothing

and women's clothing, each of these subdivided in Lower Garment, Upper Garment, Shoes, Cosmetics

and Complements, as well as children's clothing. Currently their sizing on women's clothing

goes to a US size 12 or a UK size 14 . Manufacturing and distribution

Zara is a vertically integrated retailer. Unlike similar apparel retailers, Zara controls

most of the steps on the supply-chain, designing, manufacturing, and distributing its products.

Zara set up its own factory in La Coruña in 1980, and upgraded to reverse milk-run-type

production and distribution facilities in 1990. This approach, designed by Toyota Motor

Corp., was called the just-in-time system. It enabled the company to establish a business

model that allows self-containment throughout the stages of materials, manufacture, product

completion and distribution to stores worldwide within just a few days.

Regarding the design strategy, an article in Businessworld magazine describes it as

follows: "Zara was a fashion imitator. It focused its attention on understanding the

fashion items that its customers wanted and then delivering them, rather than on promoting

predicted season's trends via fashion shows and similar channels of influence, which the

fashion industry traditionally used.

50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe, and 24%

in Asian and African countries and the rest of the world. So while some competitors outsource

all production to Asia, Zara makes its most fashionable items—half of all its merchandise—at

a dozen company-owned factories in Spain and Portugal, particularly in Galicia and northern

Portugal where labour is somewhat cheaper than in most of Western Europe. Clothes with

a longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly

in Asia and Turkey. Zara can offer considerably more products

than similar companies. It produces about 11,000 distinct items annually compared with

2,000 to 4,000 items for its key competitors. The company can design a new product and have

finished goods in its stores in four to five weeks; it can modify existing items in as

little as two weeks. Shortening the product life cycle means greater success in meeting

consumer preferences. If a design doesn't sell well within a week, it is withdrawn from

shops, further orders are canceled and a new design is pursued. Zara relies on sophisticated

information technology, such as PDAs with wireless transmission capabilities, in the

hands of store managers, to monitor customers' fickle fashion changes. Zara has a range of

basic designs that are carried over from year to year, but some fashion forward designs

can stay on the shelves less than four weeks, which encourages Zara fans to make repeat

visits. An average high-street store in Spain expects customers to visit three times a year.

That goes up to 17 times for Zara. On September 6, 2010, Financial Times reported

that Inditex launched the first online boutique for its best-selling brand Zara. The website

will begin in Spain, the UK, Portugal, Italy, Germany and France—six countries that are

among the most important of the company's 76 markets. When asked about the company's

late arrival to internet retailing, Pablo Isla, chief executive, said they have been

waiting for online demand to build before launching into cyberspace. All items on sale

at its Zara outlets would be available online and at the same prices. Customers can choose

from the usual range of paying methods and opt either for a free store pick-up or paid-for

postal delivery. The online return and exchange policy is identical to the store system, with

shoppers given 30 days to change their minds. Queries will be handled by customer service

operators or via e-mail or chat messaging. Inditex said that iPhone and iPad applications

that allowed purchasing would soon be available. On November 4, 2010, Zara Online extended

the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg.

Online stores will begin operating in the United States and South Korea in 2011. The

simple website allows shoppers to filter a search for garments by; type of garment, colours,

sizes, prices, reference number, etc. Customers can view products in precise detail from different

angles and use a SuperZoom feature to get an exceptional close-up look at the details

of each item. In 2011, Zara entered the Australian market

with a three story, 1400sqm store in the Westfield Sydney complex opened on April 21, 2011 and

a second three story 1800sqm store at Bourke Street Mall Melbourne which opened on 15 June

2011. Zara will open its third Australian store in November 2011 at Burnside Village

Shopping Centre in Adelaide, South Australia. It will be Australia's largest at 2,300sqm,

and modelled on the design of their Fifth Avenue, New York store.

In November 2011, Zara entered the South African market with a flagship store in the upmarket

suburb of Sandton, in Sandton City Shopping Complex, Johannesburg. In March 2012, Zara

opened their second store in South Africa, at Gateway Theatre of Shopping in Durban.

Later in 2012, a third store was opened in Cape Town at the Victoria & Alfred Waterfront

mall. Toxic-free production

In 2011, Greenpeace started a dialog with Zara to ban harmful toxins from the clothing

production. In November 2012, Greenpeace published the "Toxic threads: the big fashion stitch-up"

report, in which Zara was identified as the worst polluter. In 6 of the 10 clothes that

were examined, nonylphenol ethoxylates were found, and in 2 cases cancer-inducing amines

from azo dyes were found. After this publication, Zara was chosen as an example as biggest retailer

in the world to raise awareness. Multiple protests were held at Zara shops all over

the world, demanding Zara to come up with an ambitious plan to detox its clothes and

value chain. After 9 days of intense public pressure, Zara

decided to switch to a fully toxic-free production. The fashion retailer promised to stop discharging

toxins for its clothing production, which also affects 7 other brands in the Inditex

Group: Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Üterque.

Some of the most damaging toxins will be refrained of earlier, for example PFC's will be banned

by 2015. Zara also promised to make information about its suppliers discharging of toxins

publicly available for at least 100 suppliers by the end of 2013. With this commitment,

Zara follows Nike, Adidas, Puma, H&M, Marks & Spencer, C&A and Li-Ning, who implemented

a Detox-policy as well. Human rights concerns

Sweatshops On August 16, 2011, a Brazil television show

called A Liga accused the company of using suppliers who were running sweatshops for

their outsourced production. On August 17, 2011, the Regional Superintendency of Labour

and Employment of São Paulo, Brazil, closed a factory that produced Zara's clothing for

its poor labour conditions. Bolivians were brought illegally to Brazil, locked in small

apartments and sewed clothes for 12–14 hours a day. They could not leave the apartment

without the consent of the supervisor and didn't have hot water for taking showers or

food for lunch. The Bolivians earned about 1 USD for each dress they sewed, although

the retail price in Brazilian stores was about 70 USD for the same dress. Many of the workers

were forced into paying their wages to human traffickers who had smuggled them into the

country. In a statement, Zara’s representatives said

that the accusations of slave labour made against the retailer represent a “serious

breach in accordance with the Code of Conduct for External Manufacturers and Workshops of

Inditex.” They also countered that all factories responsible for unauthorized outsourcing have

been asked to regularize immediately the situation of the workers involved. “The Inditex group,

along with Brazil’s Ministry of Work, will strengthen the supervision of the production

system of all its suppliers in the country to ensure that such cases do not occur again.”

After the 2013 Savar building collapse, Zara's parent company Inditex with other retailers

signed the Accord on Factory and Building Safety in Bangladesh.

Shop staff abuse On March 21, 2012, the Swedish investigative

journalism television program Uppdrag Granskning reported stories of 25 Zara employees, both

shop managers and staff, that testified about severe abuse and terror against Zara employees

in Sweden and Europe. Zara's representative responded that the company will investigate

and solve these problems. The union of shop workers, Handels, responded that Zara had

promised improvement and was breaking its legal agreements and Unionen, which organises

white-collar workers such as shop managers, called Zara's management style "management

by fear". Stores

There are over 2,000 Zara stores located across 88 countries. Some Zara stores operate as

Lefties stores instead of Zara, a brand for low-cost fashion.

The number of Zara stores in each country, as of April 30, 2014:

References

Ferdows, K., M.A. Lewis, J.A.D. Machuca. 2004. "Rapid-fire fulfillment". Harvard Business

Review, 82(11) Butler, Sarah. "Zara's owner bucks the economic

gloom to outgrow Spain's retail banks". The Observer. 

External links Official website

Zara on Facebook