Contents
List of plates v
Foreword vii
Introduction x
1 A place called Arteixo… 1
2 An entrepreneur called Ortega… 29
3 And some ideas gestating 54
4 A family from a garage in search of gaps in the sector 68
5 The concept takes shape: manufacturing becomes industrial 79
6 Market and customer … the start and finish of everything 102
7 The first attempt to open a shop doesn’t take … but the success of Zara can be seen 112
8 Logistics: the challenge of marrying production and distribution 129
9 Thinking big: Galicia is too small… 141
H&M 150
Cortefiel 151
Adolfo Domínguez 152
Caramelo 152
(Sfera) 153
Mango 153
C&A 154
The others… 154
10 And Spain, too 156
11 Concepts aimed at reaching everybody: adding chains 167
Zara 170
Bershka 173
Massimo Dutti 174
Pull and Bear 176
Stradivarius 176
Kiddy’s Class/Skhuaban 177
Oysho 178
Zara Home 179
Chain IX: Uterqüe 181
Lefties… by way of a sale 182
Often … and other fiascos 183
12 On the road to the Stock Exchange 185
13 The market price 193
14 Isla for Castellano: the light and shade of a scare in
the form of a crisis 200
15 A model for management 214
16 Amancio, Inditex and the future … with the family? 247
Epilogue: a sensation… or perhaps rather more 257
Appendix 259
Notes 277
Index 281
Introduction
It is not always easy to clarify how and why a certain idea, and not others, can transform into a successful enterprise. Most of these ideas never get off the ground, and many of those that do take flight end up failing relatively quickly, leaving those who put time and energy into supporting such ideas without recognition. Only a few of these ideas are able to reach the point of being tangible, and this depends heavily on consumer preferences. Actually we rarely realise why the majority of entrepreneurs end up frustrated and only a few make it to the top. Even the protagonists of this book may not know everything about getting there, but their perspective is very useful in comparison to that of someone who analyses entrepreneurship only from the outside.
The more we try to give a single reason as the dominant factor in the success of an idea, the more difficult the task gets. In the same way that failures are usually complex, successes tend to respond to a combination of factors, as a unique and unrepeatable mix that leads to the final result. The tendency to try to find hidden explanations, deceptive motivations or perverse behaviours in both good and evil activity also doesn’t help us understand entrepreneurial success. Unfortunately, however, such practices are prevalent in much of modern society.
The phenomenon of Zara, the main character of this book, is not an exception to all of the suspicious practices of modern businesses. A lot of assumptions surround the story of Zara, most of which are weak and unfounded. These assumptions are merely attempts to justify how and why a simple idea grew over four decades from a tiny group in the enclave of Galicia to the world’s second largest company in its field, with a presence in more than fifty countries and a market capitalisation of nearly 32 billion euros, or 5.3 trillion pesetas for those who are not sufficiently acquainted with the new currency. This rapid growth has catapulted its founder and owner, Amancio Ortega, from being a small-town worker to the wealthiest man in all of Spain, and one of the wealthiest worldwide.
Those who make the annual Forbes list, or those who try to identify the richest people on earth, are very likely to be faced with the same questions. Some are very general, wondering whether such lists truly are comprehensive and all-inclusive, whereas others are more specific, having to do with the fundamentals behind placing such people in their given ranking position, and the characteristics that those ranked below them seem to lack.
A fascinating thing about these rankings is that they include many people who have inherited very successful family businesses and have managed to build upon initial success, but also a few who went from struggling to survive, and consequently from anonymity to building a spectacular enterprise.
There is no doubt that Amancio Ortega, number eight on the Forbes list in 2007 (see Table A2.1), is something of an icon that fits the description of someone who rose from anonymity to fortune and fame. His personal history revolves around a company that, in only forty years, has grown from a small shop in A Coruña to an entrepreneurial empire with more than 76,000 employees, a turnover of close to 10 billion, and a presence in four continents.
In the hands of Amancio Ortega lies the story of a business with little, if any, precedent in Spain. Although the lack of precedent is related to the unique nature of the figure of Zara and its development, the personal and professional characteristics of Ortega were prominent as well, and their incidence can not and should not be subtracted from the story of the company. The reality of the matter is that Inditex, the name acquired by the group in the mid 1980s, is what it is for many other reasons and circumstances, without a doubt complemented by the inspiration, will and momentum of its owner-founder.
It is important to emphasise the importance of, in the first place, a set of professionals from many fields who have been involved with and invested in the growth of the company over the many years of its existence. No less important in the development of Zara are the ups and downs of the socioeconomic environment in which it has thrived. On this point, without either of these things the history of the companywould have been drastically different. Even admitting the possibility that under different circumstances the company could have still succeeded is pointless, because it is impossible to tell whether the end result would have been better or worse. To put it clearly, if the company had been founded a few years before or after the actual date, we would be talking about another, completely different Inditex.
It goes without saying that a work like this book can not and should not develop without the cooperation and testimony of those who were directly and indirectly involved with the subject it intends to portray. Thus, I give sincere thanks and appreciation to everyone who has agreed to lend support to this project. I scrupulously went through each and every personal testimony, and unfortunately it was impossible to include everything that was said by everyone. I can confidently say that each person I talked to echoed the desire to emphasise the collective nature of the progress of Zara-Inditex.
I also owe my appreciation to Marcelino Elosúa, president of LID, promoter of the idea behind this work and constant stimulus for its completion. José Antonio Menor, my patient editor, was incredibly insistent and helpful, and I owe many thanks to him as well. Others no doubt deserve similar appreciation, and I want to thank all friends and colleagues in my personal and professional life for their selfless desire to help me with the project. Finally, I must express gratitude to you, the reader, who have decided to choose to read this work from the many others out there.