Why does ZARA refuse to be called fast fashion?

As the world's largest apparel group, Inditex SA (ITX.MC) Indyfang Group, especially the group's largest and successful brand Zara's success is a topic of industry, media, business school relish, enduring. On Wednesday, Bloomberg published an article entitled "Zara's Recipe for Success: More Data, Fewer Bosses" and then talked about Zara's success "secret."

For the success of Zara and Inditex SA, the group's chairman and CEO Pablo Isla commented that success is not because of any magical model, or superstar, but through the ability to respond to data and turn it into fashion. The product is then passed on to the consumer.

As the world's largest clothing group is rare, and more importantly, Inditex SA in the past two years is the fastest among the giants.

According to the data, as of the first half of the fiscal year ended July 31, Inditex SA Indyfang Group's net sales increased by 11.1% year-on-year to more than 10 billion euros, and the profitability of the e-commerce and large stores to maintain stable and rapid growth. . In the first seven weeks of the third quarter from August 1st to September 18th, the Group's sales increased by 13% at the local exchange rate, which was slower than the 16% growth rate in the first half of the year, but far surpassed the world's second largest clothing. Retailer Hennes & Mauritz AB (HMb.ST) recorded a 7% increase in August.

As of July 31, 2016, Inditex SA has a total of 7,096 stores worldwide, opening 83 stores in the first half of the year, and a global physical retail map after the first entry of the Zara brand in Vietnam on September 8. Expansion to 92 markets, online sales in the first half of the year in 11 new areas after the launch of 39 markets.

Visited the Inditex SA Inditex Group's headquarters in Arteixo, La Coruna, and witnessed how Zara brand buyers and design teams decided on a product. Bloomberg concluded that trends are easy to imitate, but brand culture is not easy to replicate.

Unlike competitors Gap, H&M and even Primark, Zara has no chief designer, the hierarchy between designers is weak, and 350 designers have a say in the product. Every day, designers monitor unsalable and best-selling products based on real-time sales data.

For slow-moving products, it is naturally easy to handle, and for the best-selling products, the design team will find ways to reduce the supply chain and design, and provide more cost-effective and more frequent products of the same kind.

The company revealed that in May of this year, a $102 coat was sold, and the design team used this model to design similar products with different fabrics and prints. The price range ranged from $69 to $189.

In addition to its ability to respond to data, Inditex SA's production and supply chain capabilities are also strongest in the industry. Two-thirds of Inditex SA's Indyfang Group's product delivery cycle is 20% shorter than its peers.

However, Pablo Isla, Chairman and CEO of Inditex SA Indyfang Group, rejected Zara's “Fast Fashion” label. He said that analysts have paid too much attention to the supply chain of Inditex SA's Indyfang Group, and this does not reflect the brand's ability to respond to time and design – “no design, nothing”. Unlike most fast fashion brands that place more than 80% of their production in the Asian market, Inditex SA's supply chain spans Spain, Portugal, Morocco and other European and African countries, with Asia accounting for only about 40%.

Inditex SA Pablo Isla, CEO of Indyfang Group

Pablo Isla's inauguration was ordered by Inditex SA's Indy Textile Group as the group's growth slowed, while H&M Hennes & Mauritz AB (HM-b.ST) Hein Morris Group and Uniqlo UNIQLO parent company Fast Retailing Co. Ltd. (9983.T) Fast-moving and strong growth period of Fast Retailing Group.

Zara and Inditex SA Indy Textile Group founder Amancio Ortega Gaona gave up management in 2011, giving the position of the CEO to Pablo Isla, and even the chairmanship reserved by the founders of the general family business, only reserved The basic board seats, and more experience on the real estate.

Pablo Isla, a legal professional, has served Banco Popular, the Spanish Ministry of Finance and the tobacco company Altadis group.

Under the leadership of Pablo Isla, Inditex SA Indytex has recovered rapidly and has achieved a balanced multi-brand development, keeping its competitors behind for the past two years. Inditex SA Indy's share price continued to rise, and Amancio Ortega, who dared to decentralize, was the world's richest man in the overall downturn of the apparel industry.

UBS AG (UBSN.VX) UBS analyst Andy Hughes commented on Inditex SA's success in Indytex, saying that all competitors in the industry are trying to replicate Zara's design capabilities, but no one company matches, and the biggest gap is getting closer. .