Who Owns Zara?

Inditex owns Zara, the Spanish fashion empire owned by Amancio Ortega, whose net worth in 2022 stood at over $50 billion, making him the wealthiest man in Spain. Zara is the most important asset of Inditex, contributing to over 70% of the group’s revenues. Inditex generated almost €28 billion in 2022, and Zara generated almost €20 billion in the same period.

Aspect	Description	Analysis	Examples
Products and Services	Zara offers fast fashion apparel and accessories for men, women, and children. The company’s product range includes clothing, footwear, accessories, and beauty products. Zara is known for its frequent product turnover, responsive supply chain, and emphasis on offering trendy and affordable fashion.	Zara’s core products are fast fashion items, including clothing, footwear, accessories, and beauty products for men, women, and children. The company’s unique selling point is its fast product turnover and ability to quickly respond to fashion trends. Zara provides trendy and affordable fashion options to a wide range of consumers.	Fast fashion apparel, footwear, accessories, beauty products for men, women, and children, frequent product turnover, responsive supply chain, trendy and affordable fashion.
Revenue Streams	Zara generates revenue primarily through the sale of its fashion products in physical stores and online. The company earns income from the retail prices of clothing, footwear, and accessories. Zara’s sales contribute to its parent company, Inditex Group, which operates multiple fashion brands.	The main revenue source is the sale of fashion products, including clothing, footwear, and accessories, both in physical stores and through online channels. Retail prices of these products drive revenue. Zara’s sales contribute to the overall revenue of the Inditex Group, which operates various fashion brands.	Revenue from the sale of fashion products (clothing, footwear, accessories) in physical stores and online channels, retail prices of products driving revenue, contributions to the overall revenue of the Inditex Group.
Customer Segments	Zara caters to a broad customer base, including fashion-conscious individuals of all ages and demographics who seek trendy and affordable clothing. The company offers fashion options for men, women, and children, making it a one-stop shop for family fashion needs. Zara’s target market values staying current with fashion trends and desires accessible style choices.	Zara’s customer segments encompass fashion-conscious individuals of all ages and demographics, spanning men, women, and children. The company positions itself as a one-stop shop for family fashion needs, offering options for various family members. Zara’s target market values staying current with fashion trends and appreciates accessible and affordable style choices.	Fashion-conscious individuals of all ages and demographics, men, women, and children, a one-stop shop for family fashion needs, target market valuing staying current with fashion trends and seeking accessible and affordable style choices.
Distribution Channels	Zara distributes its fashion products through a network of physical retail stores worldwide. The company also operates an e-commerce platform, allowing customers to shop online and access a wider range of products. Zara’s responsive supply chain ensures that new fashion items arrive in stores and online frequently.	Distribution channels include physical retail stores located globally and an e-commerce platform for online shopping. Zara’s responsive supply chain enables the rapid introduction of new fashion items to both physical and online channels. The combination of physical and online presence enhances accessibility to customers.	Distribution through physical retail stores worldwide, an e-commerce platform for online shopping, a responsive supply chain introducing new fashion items frequently to both physical and online channels, enhancing accessibility to customers.
Key Partnerships	Zara collaborates with suppliers and manufacturers to source materials and produce its fashion products. The company works with logistics and shipping partners to ensure timely delivery to stores and customers. Additionally, Zara partners with payment processors and technology providers for its e-commerce platform.	Collaborations with suppliers and manufacturers are critical for sourcing materials and manufacturing fashion products. Partnerships with logistics and shipping companies guarantee timely delivery to stores and customers. Cooperation with payment processors and technology providers supports the functionality of Zara’s e-commerce platform. Zara’s partnerships are essential for its supply chain and online operations.	Collaborations with suppliers and manufacturers for materials sourcing and product manufacturing, partnerships with logistics and shipping companies for timely delivery, cooperation with payment processors and technology providers for e-commerce platform functionality.
Key Resources	Zara’s key resources include its fashion product design and development teams, a global network of retail stores, an e-commerce platform, a responsive and agile supply chain, supplier relationships for sourcing materials, brand reputation for trendy and affordable fashion, and a customer-centric approach to fashion.	Fashion product design and development teams drive product creation. A global network of retail stores and an e-commerce platform provide physical and online access to customers. A responsive supply chain ensures quick product turnover. Supplier relationships support materials sourcing. Zara’s brand reputation for trendy and affordable fashion fosters customer loyalty. A customer-centric approach focuses on meeting fashion needs and preferences.	Fashion product design and development teams, a global network of retail stores and an e-commerce platform for physical and online access, a responsive and agile supply chain for quick product turnover, supplier relationships for materials sourcing, brand reputation for trendy and affordable fashion, a customer-centric approach to meeting fashion needs and preferences.
Cost Structure	Zara incurs costs related to material sourcing and production of fashion products, employee salaries and benefits for retail and corporate staff, rent and operating expenses for retail stores, marketing and advertising expenses to promote fashion collections, technology and e-commerce platform maintenance costs, and potential regulatory and compliance expenses.	Costs related to material sourcing and production ensure the availability of fashion products. Employee salaries and benefits cover staff in both retail and corporate roles. Rent and operating expenses support the operation of retail stores. Marketing and advertising expenses promote fashion collections and attract customers. Technology and e-commerce platform maintenance costs ensure online functionality. Regulatory and compliance expenses may arise to meet legal and industry requirements.	Costs related to material sourcing and production, employee salaries and benefits (retail and corporate roles), rent and operating expenses for retail stores, marketing and advertising expenses for fashion collections promotion, technology and e-commerce platform maintenance costs, potential regulatory and compliance expenses to meet legal and industry requirements.
Competitive Advantage	Zara’s competitive advantage lies in its agile and responsive supply chain, which allows for frequent product turnover and rapid response to fashion trends. The company’s global network of retail stores and e-commerce platform provides accessibility to customers. Zara’s brand reputation for trendy and affordable fashion sets it apart in the competitive fashion industry. The customer-centric approach focuses on meeting fashion needs and preferences, enhancing loyalty and retention.	An agile and responsive supply chain ensures frequent product turnover and quick response to fashion trends, setting Zara apart in the fashion industry. A global network of retail stores and an e-commerce platform enhances accessibility to customers. The brand’s reputation for trendy and affordable fashion fosters customer loyalty and differentiation. A customer-centric approach focuses on meeting fashion needs and preferences, driving loyalty and retention. Zara’s competitive advantage lies in its supply chain efficiency and customer-centric strategy within the competitive fashion landscape.	Agile and responsive supply chain for frequent product turnover and rapid trend response, a global network of retail stores and e-commerce platform for accessibility, brand reputation for trendy and affordable fashion, a customer-centric approach focusing on meeting fashion needs and preferences, competitive advantage within the fashion industry through supply chain efficiency and customer loyalty.

Table of Contents

Background

Zara is a Spanish clothing and accessories retailer that was founded in 1975 by Amancio Ortega and Rosalía Mera in the city of A Coruña, Galicia, Spain.

Zara is now one of the largest fashion retailers in the world with over 2,000 Zara stores and a further 500 home stores in 96 countries.

The company responded well to consumers flocking back to stores after COVID-19 restrictions eased, posting a net profit of €3.1 billion in the first nine months of 2022.

How did the company start? Let’s detail Zara’s history below.

Inditex

In 1963, Ortega launched the dress-making company Confecciones Goa S.A. and established sewing cooperatives with local women to offer rapid production turnaround.

Ortega was also a fashion designer who initially worked out of his sister’s home. In a formula that would become central to his later success, Ortega reproduced popular, in-demand fashion items with less expensive materials to sell at lower prices.

In the process, he developed one of the earliest versions of the fast fashion business model.

Zara is born

With business growing steadily and having acquired several other Spanish factories, Ortega opened his first retail store in 1975.

He intended to call the store Zorba after the 1964 film Zorba the Greek, but with a bar of the same name nearby, the chose Zara instead. The company was officially incorporated in 1976.

The store proved a success and expanded into several Spanish cities in the 1980s, with the first shop outside the country opening in Portugal in 1985.

The first Zara store was opened in the United States in 1989, with the 1990s marked by expansion into Mexico, Greece, Belgium, Sweden, and Israel.

Instant fashion

Around the same time the first store opened in Portugal, Ortega incorporated Inditex as a holding company as part of his “instant fashion” strategy.

In essence, the company laid the foundations for a distribution system capable of reducing lead times and increasing responsiveness to new fashion trends.

The strategy was also supported by heavy investment in information technology and the utilization of teams of designers instead of individuals.

To ensure distribution to worldwide stores in just a few days, Zara also implemented a just-in-time (JIT) manufacturing system inspired by Toyota in 1990.

Expansion

In 1991, Inditex acquired a 65% stake in the textile company Tempe which specialized in footwear production.

The deal enabled Inditex to incorporate footwear production into its business model with a particular focus on children’s shoes. In 1993, Inditex created the Lefties brand to sell old Zara fashion items.

Six years later, in 1999, Inditex acquired a 65% stake in the lingerie company Oysho to incorporate its production capabilities.

Over the 2000s, Zara expanded further with new stores opened in numerous key markets such as Brazil, Singapore, Japan, Russia, Malaysia, Indonesia, South Korea, and India.

Zara Home brand is launched

Inditex launched the Zara Home brand in 2003 which offered cutlery, crockery, glassware, furniture, bed and bath linen, and various other home items.

The brand first featured in Spanish stores with a product range that was updated frequently to reflect the company’s business model and ethos.

Since its launch, Zara Home products expanded to physical stores in more than 60 countries, including the United States, Canada, China, and the United Kingdom.

The line has been extremely successful, with sales in Spain alone amounting to €493 million in 2020.

Ownership Structure of Zara and Inditex:

Zara, the Spanish fashion empire, is primarily owned by Inditex, a holding company founded by Amancio Ortega as part of his “instant fashion” strategy.

Inditex owns a significant stake in Zara and is responsible for its overall operations. The ownership structure can be summarized as follows:

Inditex: As the holding company, Inditex owns Zara and controls its strategic direction. Amancio Ortega is a major shareholder in Inditex.
Amancio Ortega: The founder of Zara, Amancio Ortega, holds a substantial ownership stake in Inditex, making him a key figure in the company’s ownership.

Business Overview of Zara and Inditex:

Zara, under the ownership of Inditex, is a leading Spanish clothing and accessories retailer with a strong global presence.

Key highlights of Zara and Inditex’s business include:

Global Reach: Zara has over 2,000 stores worldwide, and Inditex has expanded its operations to 96 countries, making it one of the largest fashion retailers globally.
“Instant Fashion” Strategy: Amancio Ortega’s “instant fashion” strategy, implemented through Inditex, focuses on reducing lead times and increasing responsiveness to new fashion trends, enabling Zara to deliver the latest styles quickly to customers.
Diversification: Inditex has diversified its business with the creation of the Zara Home brand, offering a range of home items in addition to clothing and accessories.
Strong Financial Performance: Both Zara and Inditex have demonstrated impressive financial performance, with Zara contributing to over 70% of Inditex’s revenues.

Organizational History of Zara:

Zara was founded in 1975 by Amancio Ortega and Rosalía Mera in A Coruña, Galicia, Spain. The company initially opened its first retail store in 1975 and rapidly expanded its presence across Spain.

It later expanded into international markets, with the first Zara store outside of Spain opening in Portugal in 1985. Subsequently, Zara expanded into the United States and other key markets during the 1990s and 2000s.

In 1985, around the same time as the first store in Portugal opened, Amancio Ortega incorporated Inditex as a holding company.

Inditex’s establishment marked the beginning of the “instant fashion” strategy, which prioritized quick turnaround times for fashion production and distribution.

Key takeaways

Zara is a Spanish clothing and accessories retailer that was founded in 1975 by Amancio Ortega and Rosalía Mera in the city of A Coruña, Galicia, Spain. The company has become one of the largest fashion retailers in the world, with over 2,500 stores in 96 countries.
In a formula that would become central to his later success, Ortega reproduced popular, in-demand fashion items with less expensive materials to sell at lower prices.
Around the same time the first store opened in Portugal, Ortega incorporated Inditex as a holding company as part of his “instant fashion” strategy. This strategy incorporated various initiatives such as a Toyota-inspired JIT system and the utilization of teams of designers.