Zara Fast Fashion

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INTRODUCTION Zara is the flagship apparel chain owned and operated by Inditex of Spain. It was founded by Amancio Ortega, Spain’s richest man in 2002. Zara specializes in fashionable retail clothing and accessories. At the end of fiscal year 2001, Zara was operating 1,284 stores worldwide and had total revenue of €3,250 million. Inditex’s headquarters and its major assets are located in the Galacia region of Spain. Inditex also operates five other retail-clothing chains: Massimo Dutti, Pull and Bear, Bershka, Stradivarius and Oysho. When Inditex offered a 23 percent stake to the public in 2001, the issue was over-subscribed 26 times raising €2.1 billion for the company. At the end of 2001, Zara operated 507 stores outside of Spain generating 54% of the total revenues with a total selling area of 488,400 meters; including Spain the total selling was 659, 400 square meters. Zara, which contributes around 80% of group sales, concentrates on three winning principles: • Lower inventories –creates scarcity • Short lead times to keep up with current fashions –freshness of offering • More styles and more choices for the customers coupled with an attractive store ambience COMPANY SITUATION The current state of affairs within the company and relative to its marketplace The global apparel market is a consumer-driven industry. Globalization and new technologies allow customers increased access to fashion. As a result, consumers’ tastes are constantly changing, competition is fierce and companies are forced to respond rapidly in meeting these demands. Although Zara produces apparel and accessories for men, women and children their overall target customers tend to be fashion-conscious, female, young and middle to upper middle class. The apparel is modeled after current “fashionable” trends instead of “classically” designed clothing. As a retailer, Zara embarked on

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