Fashion factor: how the owner of Zara became $19.5 billion rich in a year. The owner of Zara is the second richest person in the world

Spanish entrepreneur Amancio Ortega, founder of the Zara chain of stores, on which the world's largest clothing retailer Inditex was created, took first place in the Forbes World Billionaires Ranking, displacing Microsoft founder Bill Gates. Ortega, with a fortune of $79.7 billion, became the leader in the real-time version of the rating, which takes into account daily changes in stock prices.

According to Forbes, over the past 24 hours, the Spanish businessman's fortune has grown by 5.2%, or $3.9 billion. As of October 23, 2015, Bill Gates ($78.1 billion) is in second place in this ranking: his fortune is day increased by 0.7%, or by $572 million. Third place was taken by investor Warren Buffett with an estimated fortune of $64.4 billion.​

A similar rating is also maintained by Bloomberg (Bloomberg Billioners Index), however, according to its estimates, as of October 22, Ortega was in second place with a fortune of $75.7 billion, and Bill Gates remained in first place, and Bloomberg estimates the fortune of the Microsoft founder much higher - $83 .8 billion

In the 2015 Forbes annual ranking, Ortega ranks fourth with a fortune of $64.5 billion, followed by Bill Gates ($79.2 billion), followed by Mexican billionaire Carlos Slim with a fortune of $77.1 billion, and Warren Buffett ($72.7) rounds out the top three. billion).

Amancio Ortega was born into the family of a railway worker in the town of Busdongo in northwestern Spain in March 1936, six months before the start of the civil war in the country. When the child was only three months old, the family moved to the town of Tolosa in the Basque Country because the father got a job there as a station master.

The Ortega family was considered poor, and at age 13, Amancio dropped out of high school and began working to help provide for the family. By that time, he had already been living with his parents for a year in La Coruña, in the province of Galicia: in 1948, his father was sent back to the northwestern part of the country.

Amancio's first place of work was a small atelier called Camiseria Gala, where he held the position of sales assistant (essentially, a messenger). At 17, he went to work for a small chain of haberdashery stores, La Maja, which owned three stores and a warehouse in the area. Also starting as an assistant, Ortega subsequently became a salesman, a traveling salesman and, finally, a manager. In 1960, a girl named Rosalia Mera took over the assistant position once held by Amancio. In 1966, the couple got married.

During these same years, Ortega, having gained the necessary commercial experience at La Maja, began thinking about opening his own business. The first employees of his company - salesmen, seamstresses - were members of his family and his young bride. From the first years of the business, Ortega formulated a principle that he still uses today: creating fashionable and high-quality, but at the same time cheap clothes by reducing textile costs and quickly realizing the product, from designer sketches to the counter.

In 1975, Ortega opened the first Zara brand store in La Coruña, which is still in operation today. Within a few years, the chain of ready-to-wear stores covered the whole of Spain, and by the mid-1980s he decided to diversify the business, starting to work for different categories of the population. In 1985, on the basis of Zara, Ortega created the Inditex holding, which subsequently united all the businessman’s brands. Over the next few years, Inditex included companies such as Massimo Dutti, Bershka, Pull&Bear and others. With revenue of €18.1 billion and net profit of €2.51 billion at the end of 2014, Inditex is the largest group in the fashion industry.

At the same time, Ortega carried out international expansion: in 1988 he opened the first Zara store in Portugal, a year later in New York, and since 1990 his stores have appeared in Paris, the Middle East and Japan. The first Zara store in Russia opened in 2003. As of October 2015, 86 Zara stores were opened in Russia out of 2.1 thousand in total worldwide. The holding’s eight main brands are represented on the Russian market; 465 of the company’s 6.7 thousand retail outlets operate in Russia.

The founder of the Zara chain of stores, Spanish entrepreneur Amancio Ortega, became the richest man, displacing Microsoft founder Bill Gates from the first place. Ortega’s fortune in the Forbes World Billionaires Ranking, which is updated in real time, amounted to $79.7 billion. Over the past 24 hours, the Spanish businessman’s fortune has increased by 5.2%, or $3.9 billion.

Amancio Ortega

The real-time Forbes World Billionaires Ranking differs from the magazine's annual ranking by updating the financial position of the world's richest people daily based on the value of stocks and other securities owned by businessmen. Bloomberg has a similar real-time rating. However, according to the Bloomberg Billioners Index, the Microsoft founder is almost $10 billion richer than the Spanish businessman. Thus, as of October 22, Bill Gates’ fortune is estimated at $83.8 billion, while Ortega ranks second with $75.7 billion.

Amancio Ortega owns Inditex, which has more than 6,750 stores in 88 countries and owns the famous brands Zara, Oysho, Massimo Dutti, Bershka, Pull and Bear, Zara Home, Stradivarius and Uterque. Ortega's brands focus on the middle class and do not try to conquer the luxury clothing market. This strategy is bearing fruit: luxury goods manufacturers are now experiencing better times, since the performance of the largest market players is affected by the economic situation in China, namely slowing demand in China and Hong Kong.

In the first half of the year, revenue at Prada in Asia, which accounts for 36% of all sales, fell 1.4% in local currency terms and 17.5% at constant exchange rates. In mainland China, this figure decreased by 1.2 and 19.3%, respectively, The Wall Street Journal reported.

According to LVMH CFO Jean-Jacques Guiony, the summer collapse of Chinese stock markets will also affect LVMH (the group's financial statements are due next week), although, in his opinion, the market will feel the decline in demand "for only a few months."

At the same time, the world's largest luxury goods maker said spending growth among Chinese travelers has slowed in recent months. “We are seeing more and more tourists from China, but they are spending a little less. The growth rate of purchases in the third quarter is not as high as it was in the first half of the year,” Gioni quotes Reuters. This situation comes against the backdrop of a weaker euro, which prompted Asian travelers to go on shopping sprees at the start of the year.

However, the fall in demand for luxury goods is currently affecting the British Burberry Group Plc the most, since up to 40% of its total profits come from purchases by Chinese consumers.

In the first half of the year, sales in the fashion house's Chinese and Hong Kong stores fell by 5 and 20%, respectively.

Another factor that also negatively affected the company's performance was their focus on the domestic, English market, which accounts for about 40% of European sales. Many “dollar” buyers take advantage of the weakening of the European currency and come to make purchases on the continent, notes MainFirst Bank AG.

The company said it could return to five percent growth in like-for-like sales in the second half of its fiscal year, which runs through March 2016. However, writes Reuters, whether the second quarter was unsuccessful for the company due to external reasons or whether the decline in performance could become a trend is still unclear.

The richest man in the world. The site's observer studied the history of the founder of the Zara chain and the Inditex group of companies - the largest organization in the field fashionable clothes.

Amancio Ortega

Amancio's childhood was difficult. The salaries of his parents, a railway worker and a maid, were barely enough to live on; they had to constantly borrow. At the age of 12, Amancio realized that this could not continue for long, and he had to help his family.

In 1950, they had to move from the Spanish city of Busdongo to La Coruña, where his father received new job. In La Coruña, Ortega began working as a messenger at the local Gala shirt store, which is still open today in the same place. While working at Gala, Amancio learned to sew clothes by hand. A few years later, Amancio got a job as a sales assistant at the La Maja haberdashery, where his brother and sister already worked. In the 60s, he became a manager in one of the city’s stores, and his future wife, 16-year-old Rosalia Mera, took the place of assistant.

Back in the early 60s, Amancio and his wife sewed robes, nightgowns and underwear themselves in a small workshop. By 1972, Amancio had accumulated ideas about running a clothing business, and he and his brother organized their own GOA factory.

There was a high level of unemployment in La Coruña, men worked at sea, leaving their wives to survive for a long time in difficult conditions. Therefore, Ortega was able to attract thousands of women to his factory. Despite the rather low salary, many agreed, because this was the only opportunity to earn money. The materials for sewing were brought from Barcelona on their own, thus cutting out intermediaries.

In 1975, an incident occurred with a partner - an order for a large batch of linen was canceled. Almost all available funds were invested in sewing this order. To save the business, Ortega decided to open his own store in La Coruña. The name "Zorba" had to be abandoned due to registration problems. This is how the first Zara store appeared.

In the late 70s and until the 90s, Zara stores from Galicia spread throughout Spain. In 1985, Ortega founded the company Inditex (Industria de Diseño Textil Sociedad Anónima), all Zara stores were united into a network, which became a subsidiary of Inditex. Things went well, and in 1988 Zara expanded beyond the country. First, a store opened in Portugal, in Porto. A year later, Zara appeared in New York, and a year later - in Paris.

Swimming against the current, Amancio Ortega manages to overtake everyone

Ortega's main ideas have always been relevance, speed and complete control at all stages - from searching for ideas to selling in his stores. These principles still form the basis of Zara.

Products in stores are updated every two weeks, delivery to warehouses must occur within 48 hours. It was precisely this restriction that had to be established during the urgent opening of the first store; Ortega decided to make this rule permanent.

With a very short product renewal cycle, a variety of small batches are brought to stores, which are guaranteed to sell. And if some things are not in demand, they are quickly replaced with more popular ones. On average, it takes 10 days from design development to item appearance in the store. Therefore, tens of thousands of clothing models change in the corporation’s stores every year, and during this time people visit them much more often than competitors’ stores.

Inditex headquarters in Arteixo

Relevance and speed go hand in hand for Ortega. Even at the beginning of the journey, when the company produced dressing gowns, the most fashionable and expensive solutions at that time served as a guideline. This approach still works today, but on a different level.

At Inditex's military-secure headquarters in A Coruña, hundreds of designers and analysts track the latest trends in different regions in real time every day. Sales and customer requests in stores, opinions of bloggers and interesting clothing options on the streets of cities around the world are taken into account.

In-store POS systems allow you to continually collect data about your customers' interests. Previously, company representatives attended fashion shows, immediately transmitting sketches to the designers' headquarters. Zara was often accused of direct copying, especially by Italian designers, but the company rejected all accusations of plagiarism, pointing out that it uses general ideas and trends in its clothes. With the advancement of technology, this way of searching for ideas is no longer necessary.

Inditex Data Center

The company spends no more than 0.3 percent of revenue on promotion, while its competitors spend much more on advertising purposes. In addition, Inditex does not attract famous designers to develop collections. The corporation’s brands are often included in the “fast fashion” category, which the company does not agree with.

This is not our approach at all, we take care of every item, every collection, coordination and production processes

Designers follow the popularity of color schemes and materials, paying attention to individual elements. Constant monitoring is also carried out social networks. Every day, at least 3 new models and patterns are created, which are immediately sent to factories, the most suitable performers are selected, who immediately begin sewing the order.

The most complex models are sewn in Spain, Portugal and Brazil, while simpler ones are sent to factories in Bangladesh, Morocco, Turkey, Vietnam, India and China. Thanks to small batches and production of some goods nearby in Spain, the company’s costs for accounting and storage of goods can be reduced compared to competitors.

Test store layout

Inditex is particularly proud of its logistics department. A huge building is located opposite their headquarters. It is there that supplies flock from all over the world. The department operates at great speed, delivering garments to the US and Europe within 24 hours and 48 hours to Asia and South America.

At Inditex headquarters, full-size mock-ups of stores are assembled for testing. They serve as exact replicas of real stores, with clothes, music, cash registers, only without customers. To make the most efficient use of materials, designers select the most suitable cutting options in special programs.

The company also strictly monitors the amount of harmful substances emitted into the atmosphere, so in its work it uses production optimization systems, which also reduces costs. The company also tries to introduce less harmful production methods in its factories, but Inditex owns only a small number of these factories.

Previously, Ortega himself called his stores every day in order to constantly be aware of what was happening, today this is done with the help of analytics tools. The founder instilled the desire to constantly monitor the needs of customers from the very beginning of the company. The speed with which designers can update products in stores is amazing; competitors take tens of times longer to do this.

In parallel with the development of Zara, Massimo Dutti joined Inditex, buying out 100 percent of the company, and opened new chains - Pull and Bear, Bershka, Stradivarius, Oysho, Zara Home, Tempe, Uterque and Lefties. The company went public in 2001 at a valuation of $8 billion.

At the moment, Inditex is the largest group of companies in the fashion market, with more than 6,777 stores in 88 countries, employing 141,192 people. While difficult economic conditions and high unemployment rates persist in Spain, Ortega's corporation continues to grow at a rapid pace and show positive results. In the first half of 2015, Inditex reported revenues of €9.42 billion and income of €1.16 billion, up 26 percent from the same period last year. The company is expanding particularly intensively in China and plans to establish a second focal point for Asia. Every day one new Inditex store opens around the world.

Amancio Ortega is a rather secretive person and very rarely appears in public. In his entire life, the richest Spaniard gave only 3 interviews. It is known that Ortega prefers a simple lifestyle, spending most of his time in Spain.

In 2011, he left his post as president of Inditex, handing it over to Pablo Isla, but owns a controlling stake of 59 percent and still advises employees, taking part in design development. He wears the same set of clothes as a uniform and can have lunch at the diner with the company employees. Ortega is ready to communicate with employees at any level, interested in the opinions of everyone, not just top managers, and he has never had a separate office. Swimming against the current, Amancio Ortega manages to overtake everyone.

The list of the richest people in the world has recently been updated. The owner of the investment company Warren Buffett, who had previously secured second place, was overtaken by the owner of the well-known company Zara, Amancio Ortega. In the first place, of course, is Bill Gates, who habitually and confidently holds the title, with others still far from reaching his almost 80 billion dollars.

79-year-old Amancio Ortega is now the owner of a fortune of 66.4 billion dollars (also a considerable amount, but what is it - simply exorbitant!) and also the richest man in Spain.

What does Mr. Ortega own? One of the most famous budget clothing stores, Zara has about 2,000 outlets around the world, of which 483 are in Spain, 84 in Russia, 66 in the UK and 42 in the USA. Today the company generates more than 10.5 billion euros per year. But it all started very simply. In 1975, together with his wife, the entrepreneur opened a small store selling underwear and bathrobes. And who would have thought that in just a couple of years a small “shop” on A Coruña would turn into a network of “doubles of models from famous fashion houses at low prices”, and later into a brand that the whole world knows about.

According to The Telegraph, the company's success lies in super-fast turnover, a record of popular products among customers, an excellent online store and a wide selection. And indeed, in Zara everyone can find something to their liking: from more classic silhouettes in the Woman department to youth clothing in TRF, not to mention the men's and children's departments. Moreover, in addition to a huge selection of styles, there is also a huge number of colors of basic items. And, of course, an impressive selection of shoes and accessories.

Convenience and excellent marketing provided Zara with a constant flow of customers of all classes. Many stars do not disdain a brand that is affordable in terms of price. Among the “fans” of Zara are Kate Middleton, Pippa Middleton, Mischa Barton, Samantha Cameron, Diane Kruger, Shania Grimes, Peneloppa Cruz, Olivia Palermo, Ciara, Ksenia Sobchak, Sati Casanova and many others who prefer casual wear practicality, comfort and style.