Zara Fast Fashion Giant

Topics: Inditex, Sales, Clothing Pages: 7 (1758 words) Published: October 13, 2014
Case Study # 1 – Zara / Due 10/13 – 10 pts / Professor Conrad Zara is one of the world’s largest and fastest growing apparel retailers, owing to a unique blend of business practices and an internal culture that many might say run “counter-intuitive” to those of competing U.S. retailers. More recently, however, industry analysts have started to suggest that the “fast fashion” business model that has made Zara so successful over the past decade has run its course and the very notion of disposable fashion is being rejected by the all important millennial market segment. Using at least one of the company/industry related databases available to you at the Marcuse (or some other) Library, as well as the attached articles and case studies, please provide a 5 page assessment of, and proposal for, Zara as follows: Context:

Briefly outline the scope of the company’s operations, including # of stores, the countries in which it operates, # of employees, annual volume and its history. HISTORY
Zara is owned by Inditex SA (Industria De Diseno Textil SA) headquartered in Arteixo La Coruña Spain with companies under the name of Zara are located in the areas listed below. Inditex sells on a global scale, with 4,900 shops in about 75 countries under different names such as Zara, Oysho, Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Zara Home, and Uterque. Inditex reported that for 2014 sales they made $22.76 billion with a one year sales growth. Their net income was $3.24 billion which was a one year net income growth. Their total assets were $18.72 billion with a market value of $81.85 billion. Zara Espana SA headquartered in Arteixo, La Coruna Spain is the flagship brand for Inditex SA and is considered the “cheap-chic subsidiary. Zara runs about 2,350 stores in major cities worldwide, as well as, some 165 Zara Kids shops in 75 countries and 125 shops across Canada, the US, and Mexico. Zara is considered a chain and sells women’s, men’s and children’s apparel. They also offer plus-size and maternity lines. I didn’t locate any information regarding who sells the plus-size and maternity garments and they are not sold online. Zara began in 1975 and is Inditex’s main chain and brings in more than two-thirds of its total sales. Ninety-nine percent of Zara stores are company-owned and other franchises or joint ventures.

COMPANY’S OPERATION
Zara produces 840 million garments per year, no extra inventory is shipped to the stores unless there is a demand for a particular garment. Zara has eight brands Zara, Zara Home, Bershka, Massimo Dutti, Oysho, Stradivarius, Pull & Bear, Uterique. They produce trendy, decently made but inexpensive products sold in beautifully hybrid looking stores located in prime shopping areas such as Redo Drive in Los Angeles and in close proximity of the luxury brands such as Prada. Prices are higher compared to H&M and the quality is better. You can purchase a sweater at Zara at a low price of $39.95 for women and at the high for $89.95. Winter Coats with no lining run around $190 and winter coats with lining run around $250 & up. Zara’s top competitors Gap, H&M and El Corte Ingles.

Zara
The Gap
H&M
El Coret Ingles
Annual Sales
$1.95B
$16.15B
$19.62B
$12.50B
Employees
--
136,000
81,099
--
Market Cap
--
$17,096.96M
$70,212.79M
--

Strategic Positioning:
1.) Briefly explain how the company implements the Six Elements of the Retail Mix as discussed in class and addressed in our text; Pricing, Location, Store Layout, Communication Mix, Customer Service and Merchandise Assortment. Zara has a clear focus and vision in the clothing market because they have captured the needs of their customers. They have shortened the conventional supply chain response time from 5-7 months to 2-2½ months. Zara makes about 40% of their raw material. The remaining 60% is outsourced from within Spain, mostly from the La Curuna. Designing of clothes at Zara is done by creative...
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