The Success Story Of Zara: From Starting With Just 30 Euros To Owning Nearly 7,000 Stores Today

From starting its journey about four decades ago in 1975, with a budget of just 30 Euros, to now being amongst the world¡¯s most popular fashion brands, Zara has come a long way. Zara belongs to Inditex, which is one of the world¡¯s largest distribution groups.

From offering clothing for men, women and children, to shoes, accessories and other fashion products, it has been broadening both its range and reach and now owns nearly 7,000 stores worldwide.

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Zara¡¯s History

Zara was founded in 1975 in Spain by Amancio Ortega and Rosal¨ªa Mera who wanted to name their shop Zorba after the film Zorba but there was already a bar in the same street with that name. So, this led them to settle at the name Zara as having two Zorba stores on the same street can lead to confusion.

In its initial days, Zara used to sell low-priced lookalike products of popular, higher-end clothing and fashion. But in the 1980s came the change.

Zara decided to change the design, manufacturing, and distribution process in order to pull down the lead times and also quickly react to new trends, which was called ¡°instant fashions¡±.

The Rise Of Zara

Soon after the 1908s, Zara started to become popular, and in no time it went beyond Spain. By the 1990s the store had already entered the US, France and many European regions.

At present, Zara reportedly has over 6900 stores spread across 88 countries in the world with over 450 million items sold in a year! Annually, it has opened around 400 stores on an average in the past 5 years.

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Zara¡¯s Competitive Advantage

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Zara is well known for its ability to be prompt in quickly delivering new clothes to their stores which are achieved by following a strict routine.

Twice a week, at precise times, store managers order clothes, and twice a week, on schedule, new garments arrive. This routine and culture are believed to be the foundation of Zara's success story and continued dominance and popularity.

And that's not all. Zara also controls its supply chain more effectively than most retailers, which is a crucial advantage it holds.

Zara¡¯s in-house production allows it to be flexible in the amount, frequency, and variety of new products to be launched. It completes the designing, manufacturing and distribution cycle in just about 2 weeks of the original design first appearing on catwalks!

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The Core Of Zara¡¯s Success Story

Zara¡¯s success story¡¯s core is its centralized enterprise resource planning. The central cloud-based software manages inventory, products, and logistics.

Moreover, Zara gets about 85% of the full price on its clothes, whereas the industry average is just 60%-70%.

Over the decades, Zara has been one typical example of a business that truly understands and tailor their customers. The company has been focusing on responding to actual fashion needs rather than forecasting fashion trends for a distant and uncertain future. This has certainly been the ultimate mantra for Zara¡¯s success story.

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