5 October 2012
Zara
Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia, and founded in 1975 by Amancio Ortega and Rosalía Mera. It is the flagship chain store of the Inditex group; 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[1] 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.[2]
Contents
1 Origins and history
2 Products
3 Manufacturing and distribution
3.1 Human rights concerns
3.1.1 Sweatshops
3.1.2 Shop Staff Abuse
4 Stores
5 Gallery
6 References
7 External links
Origins and history
The founder of Zara, Amancio Ortega, opened the first Zara store in 1975 in a central street in downtown A Coruña, Galicia, Spain.[3] 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.[4] 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.[5]
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 (1992), Greece (1994), Belgium and Sweden (1994), 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.
Zara in Dundee, UK
Zara's previous logo
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 (Zara Kids). Currently their sizing on women's clothing goes to a US size 12 or a UK size 14 .[6]
Manufacturing and distribution
The men's department of a typical Zara store. Almere, The Netherlands
Zara clothing made in Portugal
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.[7] Zara set up its own factory in La Coruña (a city known for its textile industry) 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 (JIT) 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.[8]
Regarding the design strategy, an article in Businessworld magazine[9] 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.
Zara on Briggate, Leeds after refurbishment. It now includes the new logo and store layout
Only the 5% of the products Zara sells are manufactured in Spain, 15% in the rest of Europe, and 80% in Asian and African countries and the rest of the world.[10] 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.[11]
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.[12] 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.[13] 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.[14]
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.[15]
On November 4, 2010, Zara Online extended the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg.[16] Online stores will begin operating in the United States and South Korea in 2011.[17] 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.[16]
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.[18][19][20] 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.[21]
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.
Human rights concerns
Sweatshops
On August 16, 2011, a Brazil television show called A Liga (of the Bandeirantes TV network) accused the company of using suppliers who were running sweatshops for their outsourced production.[22] 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.[23][24]
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.”[25]
Shop Staff Abuse
On March 21, 2012, the investigative journalism television program Uppdrag Granskning (from Sveriges Television) reported stories of twenty-five Zara employees, both shop-managers and shop staff, that testified about severe abuse and terror against their employees in Sweden and Europe. Zara's representative did respond that they will investigate and solve these problems in the organisation. The union of shop workers, Handels, did respond that Zara had promised improvement and was breaking their legal agreements and Unionen, organising white-collar worker such as shop-manager, called Zara's company management as "Management by fear".
Stores
There are a total of 1721 Zara stores and 187 Kiddy's Class stores. Some Zara stores operate as Lefties stores instead of Zara, a brand for low-cost fashion.
The number of Zara stores in each country (by October 31st, 2012):[26]
Africa
Morocco: 4
Egypt: 4
South Africa: 3
Tunisia: 2
Asia
China: 127
Japan: 82
South Korea: 39
Saudi Arabia: 26
Israel: 20
Indonesia: 11
Hong Kong: 10
India: 9
Malaysia: 9
United Arab Emirates: 9
Singapore: 7
Thailand: 7
Lebanon: 6
Philippines: 6
Kuwait: 5
Taiwan: 5
Kazakhstan: 3
Bahrain: 2
Jordan: 2
Qatar: 2
Syria: 2
Oman: 1
Nepal: 1
Europe
Spain: 335 y 145 Kiddy's Class
France: 119 y 4 Kiddy's Class
Italy: 88 y 12 Kiddy's Class
Germany: 69
United Kingdom: 64
Portugal: 61 y 19 Kiddy's Class
Russia: 61
Greece: 41 y 6 Kiddy's Class
Poland: 41
Turkey: 32
Belgium: 27
Netherlands: 21
Romania: 19
Austria: 12
Switzerland: 10
Croatia: 9
Ireland: 9
Sweden: 9
Ukraine: 9
Hungary: 7
Bulgaria: 6
Czech Republic: 6
Cyprus: 5
Slovenia: 5
Finland: 4
Latvia: 4
Lithuania: 4
Serbia: 4
Norway: 3
Slovakia: 3
Azerbaijan: 2
Denmark: 2
Estonia: 2
Iceland: 2
Luxembourg: 2
Andorra: 1
Armenia: 1
Bosnia and Herzegovina: 1
Georgia: 1
Macedonia: 1
Malta: 1
Monaco: 1
Montenegro: 1
North America
Mexico: 56
United States: 45
Canada: 22
South America
Brazil: 38
Colombia: 11
Argentina: 10
Venezuela: 9
Chile: 8
Uruguay: 2
Ecuador: 1
Peru: 1
Central America
Costa Rica: 2
El Salvador: 2
Guatemala: 2
Honduras: 2
Panama: 2
Caribbean
Dominican Republic: 3
Puerto Rico: 1
Oceania
Australia: 6
It is claimed that Zara needs just two weeks[1] 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.[2]
Contents
1 Origins and history
2 Products
3 Manufacturing and distribution
3.1 Human rights concerns
3.1.1 Sweatshops
3.1.2 Shop Staff Abuse
4 Stores
5 Gallery
6 References
7 External links
Origins and history
The founder of Zara, Amancio Ortega, opened the first Zara store in 1975 in a central street in downtown A Coruña, Galicia, Spain.[3] 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.[4] 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.[5]
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 (1992), Greece (1994), Belgium and Sweden (1994), 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.
Zara in Dundee, UK
Zara's previous logo
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 (Zara Kids). Currently their sizing on women's clothing goes to a US size 12 or a UK size 14 .[6]
Manufacturing and distribution
The men's department of a typical Zara store. Almere, The Netherlands
Zara clothing made in Portugal
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.[7] Zara set up its own factory in La Coruña (a city known for its textile industry) 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 (JIT) 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.[8]
Regarding the design strategy, an article in Businessworld magazine[9] 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.
Zara on Briggate, Leeds after refurbishment. It now includes the new logo and store layout
Only the 5% of the products Zara sells are manufactured in Spain, 15% in the rest of Europe, and 80% in Asian and African countries and the rest of the world.[10] 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.[11]
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.[12] 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.[13] 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.[14]
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.[15]
On November 4, 2010, Zara Online extended the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg.[16] Online stores will begin operating in the United States and South Korea in 2011.[17] 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.[16]
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.[18][19][20] 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.[21]
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.
Human rights concerns
Sweatshops
On August 16, 2011, a Brazil television show called A Liga (of the Bandeirantes TV network) accused the company of using suppliers who were running sweatshops for their outsourced production.[22] 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.[23][24]
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.”[25]
Shop Staff Abuse
On March 21, 2012, the investigative journalism television program Uppdrag Granskning (from Sveriges Television) reported stories of twenty-five Zara employees, both shop-managers and shop staff, that testified about severe abuse and terror against their employees in Sweden and Europe. Zara's representative did respond that they will investigate and solve these problems in the organisation. The union of shop workers, Handels, did respond that Zara had promised improvement and was breaking their legal agreements and Unionen, organising white-collar worker such as shop-manager, called Zara's company management as "Management by fear".
Stores
There are a total of 1721 Zara stores and 187 Kiddy's Class stores. Some Zara stores operate as Lefties stores instead of Zara, a brand for low-cost fashion.
The number of Zara stores in each country (by October 31st, 2012):[26]
Africa
Morocco: 4
Egypt: 4
South Africa: 3
Tunisia: 2
Asia
China: 127
Japan: 82
South Korea: 39
Saudi Arabia: 26
Israel: 20
Indonesia: 11
Hong Kong: 10
India: 9
Malaysia: 9
United Arab Emirates: 9
Singapore: 7
Thailand: 7
Lebanon: 6
Philippines: 6
Kuwait: 5
Taiwan: 5
Kazakhstan: 3
Bahrain: 2
Jordan: 2
Qatar: 2
Syria: 2
Oman: 1
Nepal: 1
Europe
Spain: 335 y 145 Kiddy's Class
France: 119 y 4 Kiddy's Class
Italy: 88 y 12 Kiddy's Class
Germany: 69
United Kingdom: 64
Portugal: 61 y 19 Kiddy's Class
Russia: 61
Greece: 41 y 6 Kiddy's Class
Poland: 41
Turkey: 32
Belgium: 27
Netherlands: 21
Romania: 19
Austria: 12
Switzerland: 10
Croatia: 9
Ireland: 9
Sweden: 9
Ukraine: 9
Hungary: 7
Bulgaria: 6
Czech Republic: 6
Cyprus: 5
Slovenia: 5
Finland: 4
Latvia: 4
Lithuania: 4
Serbia: 4
Norway: 3
Slovakia: 3
Azerbaijan: 2
Denmark: 2
Estonia: 2
Iceland: 2
Luxembourg: 2
Andorra: 1
Armenia: 1
Bosnia and Herzegovina: 1
Georgia: 1
Macedonia: 1
Malta: 1
Monaco: 1
Montenegro: 1
North America
Mexico: 56
United States: 45
Canada: 22
South America
Brazil: 38
Colombia: 11
Argentina: 10
Venezuela: 9
Chile: 8
Uruguay: 2
Ecuador: 1
Peru: 1
Central America
Costa Rica: 2
El Salvador: 2
Guatemala: 2
Honduras: 2
Panama: 2
Caribbean
Dominican Republic: 3
Puerto Rico: 1
Oceania
Australia: 6
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