THE SYDNEY MORNING HERALD: Amid the pervading gloom in the retail sector, one fashion chain is so dazzlingly successful its founder has overtaken Warren Buffett as the third-richest man in the world. Amancio Ortega, the major shareholder of fashion retailer Zara, was the fastest mover on the annual Forbes magazine rich list released this week. The personal wealth of the 76-year-old Spaniard grew by almost $20 billion to $57 billion in the past year on the back of Zara's record profits. Only Mexican telecommunications giant Carlos Slim and Microsoft founder Bill Gates are wealthier.
Zara has cracked the secret recipe for fashion retail success, and customers love it - but it is not a model that impresses all observers.
''Zara has really driven the formula for modern-day chains in that what they are capable of doing is getting on-trend fashion into store faster, higher quality and better priced than most of its competitors,'' said Karen Webster, chairwoman of the Australian Fashion Council. ''They're able to get the Prada look in store before Prada does.''
Since opening its first store in Galicia, Spain, in 1975, Zara (owned by fashion distributor Inditex) has grown to a worldwide success story that can lay claim to developing the philosophy of ''fast fashion''.
It's a model that relies on fast turnover of stock at its 1700 global stores to always keep the customer enticed, always seeing new products and hopefully coming back to buy more.
While even the best-run traditional fashion retailers might have new stock in the store every four weeks, Zara has compressed that to between two and three weeks and is believed to launch 10,000 new designs a year.
This model led one fashion industry executive to describe Zara as ''possibly the most innovative and devastating retailer in the world''.
Zara's success is based on not exactly copying, but ''editing'' the latest catwalk looks from premium fashion houses, insiders said. » | Eli Greenblat, Kelsey Munro | Saturday, March 09, 2013
