Inditex’s Zara Leads The Pack Of Fast Fashion Retailers
When it comes to fast fashion, Inditex has a leg up against major rival H&M, although the two remain major global fashion retailers. For Inditex, Zara, its major division, is a major contributor to the company’s success. Zara remains on top of the game when it comes to pushing out styles in rapid succession.
At Zara, new fashions are developed daily. In fact, sometimes three to four new designs are developed in a single day, which proceeds to reviewing and later production. That rapid style development has made it possible for Zara to fend off competition to stay on top of fashion competition.
Moving fast with style
For Inditex, Zara is that business arm that holds the secret of fast fashion industry. Players in the fast fashion industry know that the winning formula involves quick turnover of products in stores. That means that new fashions need to be developed at a rapid rate, reviewed equally fast, and produced for quick delivery. Those are areas that Zara has perfected, which makes it possible for Inditex to put new designs in the store within a very short time.
Inditex, the owner of Zara, is headquartered in Spain and operates 6,683 stores globally in 88 countries. The company has just 55 stores in the U.S., of which 53 are Zara stores and two are Massimo Dutti stores. The company generated sales of $19.7 billion in the fiscal year ended January 2015.
Zara stores brought in the most sales for Inditex at $12.6 billion in fiscal 2014, which ended in January 2015. There are less than 2,000 Zara stores in 88 countries across the world. Zara stores mainly focus on fast fashion for women, children and men. There is also Zara Kids, which is a new division within Inditex and operates 126 stores in just four countries.
Slow down in capital expenditure
Inditex recently announced that it will begin sharing its profits with employees. This year, Inditex intends to lower its capital investment. The company plans to spend 1.35 billion euros on capital expenditure in 2015, compared to 1.396 billion euros in 2014. The move comes after the company registered a decent uptick in profits thanks to online expansion.
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