1975 to Present
WorldwideZara SA, stylized as ZARA, is a Spanish apparel retailer based in Arteixo in Galicia. The company specializes in fast fashion, and products include clothing, accessories, shoes, swimwear, beauty, and perfumes. It is the largest company in the Inditex group, the world's largest apparel retailer. Zara as of 2017 manages up to 20 clothing collections a year.
Zara was founded in 1975 by Amancio Ortega and Rosalía Mera as a family business in the northern part of Spain, downtown Galicia. Its first store featured low-priced, trendy, high-end clothing and fashion lookalike items. Amancio Ortega called Zara as such because his preferred name Zorba was already taken.
Inditex was founded as a holding company in 1985 and laid the groundwork for a distribution network that could respond extremely quickly to changing market trends. Ortega developed a revolutionary design , production, and delivery process that could minimize lead times and respond more rapidly to new trends, which he called "instant fashion." This was driven by heavy investment in information technology, and the use of groups for the critical "design" element instead of individual designers.
Inditex spends over USD 50 million annually on services and projects in the social and community market. For example, its "for&from" program launched in 2002 has enabled people with physical and mental disabilities to be socially integrated by providing more than 200 stable job opportunities in 15 stores.
Ortega passed the Chairman title on to Pablo Isla, Zara’s Deputy CEO since 2005. Industry analysts predict that Zara is set to be succeeded by his 35-year-old daughter, Marta Ortega, who is currently senior creative consultant for all Zara Woman’s collections.
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.
In September 2010, Zara launched its online boutique. The website began in Spain, the UK, Portugal, Italy, Germany and France. In November that same year, Zara Online extended the service to five more countries: Austria, Ireland, the Netherlands, Belgium and Luxembourg. Online stores began operating in the United States in 2011, Russia and Canada in 2013, Mexico in 2014, South Korea in 2014, Romania in 2016, India in 2017 and Brazil in 2019.
In 2011, Greenpeace started a dialog with Zara to ban toxics from the clothing production. 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. 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. Zara became the biggest retailer in the world to raise awareness for the Detox Campaign, and switched to a fully toxic-free production.
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.
A lady named Miko walked into a Zara store in Tokyo in 2015 and asked the store assistant for a pink scarf but there were no pink scarves in the store.The same happened in Toronto, San Francisco, and in Frankfurt, who all had customers that walked into Zara stores and asked for pink scarves, almost simultaneously. They all left the shop without any scarves – an event many other Zara fans experienced globally over the next few days in various Zara shops. Seven days later, over 2,000 Zara stores started selling pink scarves globally. There were 500,000 pink scarves sent-to be precise. They sold out within three days.
In 2016, BBC News stated they found evidence of child labor 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.
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.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.
In the midst of the COVID-19 crisis in 2020, Zara was hit hard by global store closures, with sales falling 44% year-on-year in Q1 2020 and the company reporting a net loss of USD 482 million. Inditex has announced it will close between 1,000 and 1,200 stores across the world, concentrating on the smaller ones in Asia and Europe. Although online sales have been motivating – Zara 's online sales have risen 50% for Q1 2020 – mitigating the damage is not enough.