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ZARA (History of ZARA (ZARA is a Spanish clothing and accessories retail…
ZARA
History of ZARA
ZARA is a Spanish clothing and accessories retail based in Arteixo, Galicia.
The company was sounded in 1975 by Amancio Ortega Gaona and his wife, Rosalia Mera
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Ortega began international expansion with ZARA stores in Portugal, Paris and New York
ZARA's parent company Inditex took on 4 other formats; Pull & Bear; Massimo Dutti; Bershka; Stradivarius and in 2001 had launched Oysho
ZARA's unique integrated business model had led to ZARA being desribed as "possibly the most innovative and devastating retailer in the world" by Daniel R. Piette CEO LV Capital
Inditex made an initial public offering os stock in May 2001 and was by then the world's thrid largest clothing retailer
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In-house Manufacture
In-house manufacture entailed two basic steps: fabric procurement and garment assembly and finishing
Based on decisions about which styles were to be produced an in what sizes, the ZARA factories cut the fabric. The cut fabric pieces were marked and bundled for sewing
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Deliveries between the ZARA factories and the subcontractors occured many times a week, with subcontractors picking up new work as they left off completed work
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Patterns and Samples
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Or the paper pattern and a sample garment were prepared in-house, with ZARA's pattern makers
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Distribution, Retailing and The Stores
Distribution: Shipment were made out of DC twice a week, by truck to Europe and by air-freight to stores outside Europe
Retailing: Stores managers asked for the items from collection that they wanted at their stores, but the final allocations of inventory were made centrally
ZARA stores were uniform, inluding as to lighting, fixtures and window display, as well as the arrangement of garments, with a targeted floorspace of 1200 square meters
A Sourcing of Dilemma
Inditex's CEO, Castellano and other members of his management team, together with Ortega, constantly revisited ZARA's strategy
ZARA had announced that the proportion of outsourced manufacture would grow, initially to 60 percent, to take advantage of increased low cost production coming on-line, principally in China
In-season Production
ZARA committed only 50-60 percent of production in advance of the season, with the remainder manufactured on a rolling basis during the season
It was the ability to respond in-season that gave ZARA a different fashion risk profile from other apparel retailers
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