History of Zara

Zara’s history begins with the owner company, The Inditex Group. Inditex Group is a large company based out of Spain running around one hundred stores dealing with textile design. Inditex operates over 4,350 stores worldwide with brands like Massimo Dutti, Bershka, Oysho, Pull and Bear, Zara, Zara Home, Uterque, and Stradivarius (History of Zara, 2008). Amanico 5  Ortega Gaona, CEO, founder, and Spain’s richest man founded Zara in 1975. Zara’s first store was in A Caruna where the headquarters now lay and featured lower priced lookalikes of high end, popular products selling to women, men, and children (Zara (Clothing) 2009).

Beginning in the nineteen eighties Zara began experimenting with differentiating the design, manufacturing and distributing progression in order to condense lead times and respond faster to new trends. Gaona considered this to be “instant fashion.” Instead of individuals, Zara used information technologies and groups of designers to base its improvements in fashion. In 1998, the company began its international development through Portugal’s second city, Porto. By 1989 Zara entered the United States and by 1990 entered France. Zara’s international development expanded to Mexico in 1992, Greece in 1993, and Belgium and Sweden in 1994. Zara continued to open stores around the world until there were stores in seventy countries. This includes more than 519 stores in Spain, 116 stores in France, 87 stores in Italy, and 45 stores in the USA (Zara: Cool Clothes Now, Not Later).

Threats and Opportunities- ZARA

Some threats that affect ZARA include international expansion, geographic scope, and intense competition. Zara recognizes that the company needs to have a competitive advantage in order to survive, so they are constructing a second distribution center in Zaragoza. Also the company is still looking to expand internationally. Expanding in Spain is difficult for the company because of past experience in Sweden. Zara is considering expansion in North 7 America, but is concerned that it is already suffering from retail saturation, less fashion-forward sense, the demand for plus sizes, lots of competition, and not enough demand for the clothing.

Some opportunities faced by Zara are expansion into other countries such as Europe focused primarily on Italy and scale up its distribution system. If Zara continues to expand it will then help to create a more recognizable brand name to consumers and in turn also help make a higher profit. In the construction of the second distribution center will help the growth of the company (“Zara history and,” 2009).