Shopping Centers Today International

JAN 2016

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Zara S pain-based Zara, indisputably the fastest and most influential of the apparel world's fast-fashion retailers, sped up its store-opening tempo last year. Parent company Inditex Group opened 350 new stores across its brands internationally and has plans for a re- peat performance this year. Compared to fast-fashion competitor H&M, Zara is sparsely concentrated in the U.S., with fewer than 60 stores. In Spain it operates nearly 500 stores, and in China it has about 170. "Zara maxed out in Spain years ago, and if they were going to grow, they needed to learn international skills," said David Zoba, global retail leasing board chairman at JLL. "And they have." Zoba says Zara is currently the best of the fast-fashion lot, and is certainly the most profitable, with plenty of room for North American growth. With 2,000 stores across 88 countries, Zara is the flag- ship concept of Spain's Inditex Group, the world's largest apparel seller — having about 6,700 retail units worldwide, in- cluding Zara Home, Massimo Dutti, Pull & Bear and Stradivarius, with annual combined sales of some $23 billion. Zara co-founder Amancio Ortega, whose esti- mated worth is about $100 billion, has alternated between being the third- and the fourth-richest man in the world. At Zara, which directly controls all its supply-chain steps, from design to manu- facturing to distribution, change is a con- stant. The retailer commits only about 20 percent of each season's product line six months in advance and secures only about half that line by season's start, giving it plenty of flexibility to react to popular styles of the season. Designs are tweaked constantly, creating a sense of scarcity, and deliveries are made in small batches, resulting in little excess in- ventory. Zara factories slate their weekly runs at less than capacity to leave room for quickly produced lines. Merchan- dise, which is labeled and priced before it hits the stores, is typically well made yet inexpensive and is sold in splashy stores on high streets and in malls. Zara has almost by itself reca- librated the industry's fashion cycle from two annual collections to five or six, with about half of the high-end fashion companies following suit. One of Zara's highest-profile customers is Britain's Kate Middleton. Zara's highest store volumes behind Spain and China are France (with 127), Italy (101), Japan (98), Russia (89), Portugal (82), Germany (80), the U.K. (67) and Mexico (65). About half the products Zara sells are manufactured in Spain; its main Spanish warehouse mea- sures a whopping 5 million square feet. Zara's North American stores mea- sure from between 13,000 square feet to 43,000 square feet — the latter being the size of Zara's New York City flagship store, on Fifth Avenue. S C T J a n u a r y 2 0 1 6 / S C T 35

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