The Fashion Industry in Galicia: Understanding the ‘Zara’ Phenomenon ARTURO REVILLA BONNIN
ABSTRACT Galicia is traditionally one of the weaker regional economies in Spain. However it is home to one of the most successful global marketing phenomena of the age. Zara, the mid-market fashion arm of the Galician INDITEX Group, is amongst the ‘culprits’ that have been blamed for the demise from high street hegemony of such European retail notables as C&A, Littlewoods and Marks & Spencer. In this paper an analysis is provided of the mechanisms by which this peripheral region has succeeded in producing, from virtually nothing, a globally outstanding retail fashion industry in one of the world’s most cutthroat competitive industries. It is shown that regional, national and supra-national factors have had important parts to play, but that the Galician approach is nevertheless unique, compared to that of other fashion clothing regions. Among the special features at play are high levels of tacit and codi ed knowledge exploitation, integrated design, production and retailing and advanced retail feedback technology that enables anticipation of customer preference. 1. Introduction The fashion industry in Galicia presents different characteristics from that in the rest of Spain. Until the end of the 1970s, the Spanish textile industry was highly protected, oriented mainly towards domestic markets and with a very restricted exporting capacity, in spite of State aids and the competitiveness of its products due to low wages. These factors favoured the growth of a sector that, in spite of this, showed low productivity and high excess of installed productive capacity. The crisis at the end of the 1970s and change in economic policies were the trigger for a strong crisis in the sector and its later transformation. First came a renewal policy, strongly supported by the public sector by means of different restructuring plans. The result of these plans gave rise to an important adjustment in productive capacity and staf ng, and it also made possible the injection of nancial resources to the companies that managed to access industrial aid packages. This, together with the persistence of important import restrictions explains why the Spanish fashion industry kept on showing a positive export balance during the rst half of the 1980s. The entrance of Spain into the European Union (EU) meant an important change because an important tariff deregulation took place and the Arturo Revilla Bonnin, Sociedade para o Desenvolvemento Comarcal de Galicia (Department of Development Studies), Estr. Santiago-Noia, km 3 (A Barcia) 15896, Santiago de Compostela, Spain. E-mail: arevilla@cetadec. net ISSN 0965-4313 print/ISSN 1469-5944 online/02/040519– 09 DOI: 10.1080/0965431022013021 1 Ó 2002 Taylor & Francis Ltd
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policy for export promotion was eliminated. At the same time, a restrictive monetary policy was implemented. The main consequences of this policy were high interest rates, which negatively affected business costs, and the peseta revaluation, which meant a negative impact in the foreign sector. However, the disappearance of protectionism favoured the introduction of cheap products coming from developing countries, which occasioned a loss of market share in the domestic sector. The Spanish fashion industry reaction was swift in giving strong support to quality, design and foreign markets. Compared to the rest of the European continent the case of Galicia is interesting because the textile industry and, particularly, dressmaking are something very recent and without the tradition found in other Spanish regions like Catalonia or Valencia, which have strong craft and industrial capabilities. In less than 20 years, this industry has become one of the main assets of the Galician economy, one of the most dynamic sectors, with prestige and positive future...