Zara Background Information

Background information

Founded by Amancio Ortega (one of the richest today). 1975 in Spain

Zara was the pioneer of a new fashion category and was the first to coin the term “fast fashion.”

Fast fashion - “trendy catwalk-inspired items manufactured quickly and sold at affordable prices.”

H&M, Forever 21, and Uniqlo are companies that have followed Zara’s fast fashion examples.

Offer fashionable clothes at cheap prices

Zara reported sales of 15.9billion in 2016

As of 2016, Zara has over 2,100 stores in 88 different countries

Zara’s revenue accounts for about 75% of Inditex (Zara’s parent company) revenue.

Inditex went public in 2005, Isla became CEO

Inditex currently owns 8 different brands besides Zara - Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho

All of these companies are ran independently and have different strategic positions in the market. For instance, Massimo Dutti is a high-end fashion clothing brand while Pull and Bear is a casual laid-back clothing for young.

Over the past few years, Zara has successfully entered Asian market and expanded aggressively.

As of 2008, Zara had only 96 stores in Asia-Pacific region; today, it has over 300 stores in Asia.

Industry Analysis and Zara’s position within its market.

The global retail apparel industry is still a fast growing industry with significant growths made in developing countries.

There are two big factors driving growth in the fashion industry

Changing demographics

Urbanization of the global population.

According to the Mckinsey & Company report on succeeding in the future fashion market, by 2020, a quarter of global wealth will be concentrated in just 60 mega cities.

Global population in 2050 - 9 billion (from about 7 billion as of 2017).

The fashion industry is still seemed to be on a trajectory for massive growth, tied to a growing middle class in developing nations - leading to a huge increase in spending on fashion clothing.

Online purchases were on a fast growth trajectory as well, representing 15% of women’s apparel sales in the United States, up an astounding 17 percent over 2012.

“Price point clearly became a defining factor during economic downturns.” People became