Zara (retailer)

Zara SA, stylized as ZARA, (Spanish: [ˈθaɾa]) is a Spanish apparel retailer based in Arteixo (A Coruña) in Galicia, Spain.[4] The company specializes in fast fashion, and products include clothing, accessories, shoes, swimwear, beauty, and perfumes.[5] It is the largest company in the Inditex group,[6] the world's largest apparel retailer. Zara as of 2017 manages up to 20 clothing collections a year.[7]

Zara SA
TypeSociedad Anónima
IndustryRetail
Founded1975 (1975) (as Zorba) in Spain
FoundersAmancio Ortega
Rosalía Mera
Headquarters
Arteixo (A Coruña), Spain
Number of locations
2,270 stores [1]
Area served
Worldwide
Key people
ProductsClothing
Revenue€18,021 million (2018)[2][3]
ParentInditex
Websitezara.com

History

Early history

Amancio Ortega opened the first Zara store in 1975 in central A Coruña, Galicia, Spain. Ortega initially named the store Zorba after the classic film Zorba the Greek, but after learning there was a bar with the same name two blocks away, they rearranged the letters molded for the sign to "Zara". It is believed extra "a" came from an additional set of letters that had been made for the company.[8][9] The first store featured low-priced lookalike products of popular, higher-end clothing fashions. Ortega opened additional stores throughout Spain. During the 1980s, Ortega changed the design, manufacturing, and distribution process to reduce lead times and react to new trends in a quicker way, which he called "instant fashions". The improvements included the use of information technologies and using groups of designers instead of individuals.

Expansion

In 1985, Amancio Ortega set up a parent company for Zara before going for the global expansion, and in 1988, the company started its international expansion through Porto, Portugal.[10] In 1989, it entered the United States, and then France in 1990.[11] During the 1990s, Zara expanded to Mexico (1992),[12] Greece, Belgium and Sweden (1993). In the early 2000s, Zara opened its first stores in Brazil (2000); Japan and Singapore (2002); Russia and Malaysia (2003),[13][14][15] China,[16] Morocco,[17] Estonia,[18] Hungary[19] and Romania (2004);[20] the Philippines,[14] Costa Rica[21] and Indonesia (2005);[22] South Korea (2008);[23] India (2010);[24] Taiwan, South Africa and Australia (2011),[25][26] Peru (2012).[27]

In September 2010, Zara launched its online boutique. The website began in Spain, the UK, Portugal, Italy, Germany and France.[28] In November that same year, Zara Online extended the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg.[29] Online stores began operating in the United States in 2011,[30] Russia and Canada in 2013,[31][32][33] Mexico in 2014,[34] South Korea in 2014,[35][36] Romania in 2016,[37] India in 2017, Brazil in 2019 and Peru in 2020.[38]

Zara introduced the use of RFID technology in its stores in 2014. The RFID chips are located in the security tags which are removed from clothing when it is purchased and can be reused. The chip allows the company to quickly take an inventory by detecting radio signals from the RFID tags. When an item is sold, the stockroom is immediately notified so that the item can be replaced. An item that is not on the shelf can easily be found with the RFID tag.[39]

In 2015, Zara was ranked 30 on Interbrand's list of best global brands.[40]

In 2019, Zara had updated the logo.[41]

In 2019 the Global Fashion Business Journal stated that while the textile commerce of the world had gone down by 2.38%, Zara had risen 2.17%.[42]

In 2019, Chief Executive Persson said the brand is waiting for more acceptable global rent levels to continue their expansion. In Europe, the brand will be cutting the number of locations the next year.[43]

Products

Zara stores have men's and women's clothing as well as children's clothing (Zara Kids). Zara Home designs are located in European stores. Zara's products are supplied based on consumer trends. Its highly responsive supply chain ships new products to stores twice a week. After products are designed, they take ten to fifteen days to reach the stores.[44] All of the clothing is processed through the distribution center in Spain. New items are inspected, sorted, tagged, and loaded into trucks. In most cases, the clothing is delivered within 48 hours. Zara produces over 450 million items per year.[45]

Manufacturing and distribution
The men's department of a typical Zara store. Almere, Netherlands
Zara clothing made in Portugal
Zara store in New York City, near One World Trade Center
Zara store in Brisbane
Zara store in Palma de Mallorca (Spain)
Zara store in Brussels (Belgium)

Reportedly, Zara needs just one week to develop a new product and get it to stores, compared to the six-month industry average, and makes roughly 40,000 designs of which around 12,000 new designs are carefully selected and produced each year.[46] Zara has a policy of zero advertising;[8] the company preferred to invest a percentage of revenues in opening new stores instead.[47]

Zara set up its own factory in La Coruña (a city known for its textile industry) in 1980 and upgraded to reverse milk-run-type production and distribution facilities in 1990. This approach, designed by Toyota Motor Corp., was called the just-in-time (JIT) system. It enabled the company to establish a business model that allows self-containment throughout the stages of materials, manufacture, product completion, and distribution to stores worldwide within just a few days.[48]

Most of the products Zara sells are manufactured in proximity countries like Spain, Portugal, Turkey and Morocco.[8][49] While some competitors outsource all production to Asia, Zara manufactures its most fashionable items – half of all its merchandise – at a dozen company-owned factories in Spain and Portugal and Turkey, particularly in Galicia and northern Portugal and Turkey. Clothes with a longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly in Asia.[50]

The company can design a new product and have finished goods in its stores in four to five weeks; it can modify existing items in as little as two weeks. Shortening the product life cycle means greater success in meeting consumer preferences.[51] If a design does not sell well within a week, it is withdrawn from shops, further orders are cancelled and a new design is pursued. Zara monitors customers' fashion changes.[52] Zara has a range of basic designs that are carried over from year to year, but some fashion-forward designs can stay on the shelves less than four weeks, which encourages Zara fans to make repeat visits. An average high-street store in Spain expects customers to visit three times a year. That goes up to 17 times for Zara.[53]

As a result of increasing competitive pressures from the online shopping market, Zara is shifting its focus onto online as well, and will consequently open fewer but larger stores in the future.[54]

Non-toxic clothing

In 2011, Greenpeace started a dialog with Zara to ban toxics from the clothing production.[55] Greenpeace published its "Toxic threads: the big fashion stitch-up" report in November 2012 as part of its Detox Campaign identifying companies that use toxic substances in their manufacturing processes.[56] Nine days after the report was published, Zara committed to eradicating all releases of hazardous chemicals throughout its entire supply chain and products by 2020.[57] Zara became the biggest retailer in the world to raise awareness for the Detox Campaign,[58] and switched to a fully toxic-free production.[55]

Exploitation and child labour

In 2016, BBC News stated they found evidence of child labour and exploitation in factories in Turkey. Zara replied that there were some issues in June 2016 in one single factory and, instead of solving these issues immediately, they have given a period of six months to solve them.[59]

Controversies

Allegations of antisemitism

In 2007, Zara withdrew a handbag from their shelves after a customer noticed a swastika on the bag's design. The bag came from an external supplier, and Zara claimed the symbol was not visible when the handbag was chosen. Zara withdrew the product from stores, and spokesperson Susan Suett said the bag would not have been sourced had the symbol been apparent.[60]

In August 2014, Zara received criticism for selling a toddler T-shirt for closely resembling uniforms worn by Jewish concentration-camp inmates. The T-shirt was striped and featured a yellow star similar to the Star of David. Zara said the design was inspired by "the sheriff's stars from the classic western films". Zara removed the shirt from sale a few hours after they appeared for sale, and apologized.[61] Zara received criticism for selling the T-shirt in Israel because the country does not have sheriffs. Additionally, the word "Sheriff" is outlined in transparent letters on the bright yellow star.[61] The Anti-Defamation League responded to the shirt, saying that it was offensive, but welcomed Zara's recognition of the potential imagery and removing the shirt from sale.[62]

Zara store in Columbus, Ohio

Labour practices

In August 2011, a Brazilian television show accused the company of using sweatshops for their outsourced production. The Regional Superintendency of Labour and Employment of São Paulo, Brazil, closed a factory that produced Zara's clothing for its poor labour conditions.[63] Zara's representatives said the accusations of slave labour made against the retailer represent a breach of the code of conduct for workshops of Inditex. The company also states factories responsible for unauthorized outsourcing have been asked to regularize immediately the situation of the workers involved.[64]

In September 2013, Bangladeshi garment workers for suppliers to Zara and its parent company, Inditex, protested following the 2013 Dhaka garment factory collapse, demanding a US$100 a month minimum wage.[65] Inditex does not publicly disclose the factories that produce their branded clothing.[66]

In November 2017, customers shopping at Zara stores in Istanbul, Turkey, found handwritten notes purportedly from Turkish workers in the pockets of in-store garments asking shoppers to pressure Zara into paying them unpaid wages.[67] The company clarified the unpaid wages were due to a third-party manufacturer, who had failed to pay their employees. The company said they would help to provide compensation to employees who weren't paid.[68] In the agreement, only factory-floor employees were compensated, with "white-collar" employees not covered by the agreement.[69]

In July 2016, complaints were made against Zara that they had been stealing designs from multiple independent designers for their products. One of the designers, Tuesday Bassen, who previously worked with brands including Urban Outfitters and Nike, contacted Zara. The company responded Bassen's designs were not distinctive enough, and they received only a handful of complaints given the large volume of traffic they receive on their site. When the news was eventually picked up by media outlets, and Inditex, Zara's owning company, was asked to comment on the issue, Inditex replied that the items in question have been suspended from sale, and that they are in contact with Bassen's lawyer to clarify and address the issue.[70][71]

As of April 2018, MaXhosa by Laduma is taking legal action against Zara for copying its designs.[72] Zara responded to complaints from the designer by removing socks that resembled his artistic style.[73]

Political

In January 2018, Shanghai's internet authority summoned representatives of Zara, chastising the company for listing Taiwan as a "country" and ordering it to rectify the situation immediately.[74]

In June 2018, a Zara jacket with "I really don't care, do U?" emblazoned on the back became controversial after it was worn by Melania Trump when she visited a detention center for migrant children separated from their parents.[75]

In September 2019, Zara supported Hong Kong strikes; however after pressures from Chinese social media Zara was forced to issue a statement expressing its support of the "one country, two systems" policy adopted by China in ruling Hong Kong, and its disapproval of anti-government strikes.[76]

Stores

There are 2259 Zara stores in 96 countries.[77][78][79]

In early 2020 due to the pandemic (COVID-19), ZARA stores worldwide had closed temporarily due to restrictions. However, in April 2020, ZARA owner ramps up shipment to Asia as China ends lockdown after 76 days, and shoppers returns and business picks up again.[80]

See also

References
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