CHAPTER 2 CASE STUDY
Zara International: Fashion at the Speed of Light
At the announcement of her engagement to Spain's Crown Prince Felipe, Letizia Ortiz Rocasolano wore a chic white trouser suit; within a few weeks, hundreds of European women sported the same look. Welcome to fast fashion, a trend that sees clothing retailers frequently purchasing small quantities of merchandise to stay on top of emerging trends. In this world of “hot today, gauche tomorrow,” no company does fast fashion better than Zara International. Shoppers in 78 countries, including Canada, have taken to Zara's knack for bringing the latest styles from sketchbook to clothing rack at lightning speed and reasonable prices.
In Fast Fashion, Moments Matter Because style - savvy customers expect shorter and shorter delays from runway to store, Zara International employs a stable of more than 200 professionals to help it keep up with the latest fashions.
It takes just two weeks for the company to update existing garments and get them into its stores; new pieces hit the market twice a week. Defying the recession with its cheap – and - chic Zara clothing chain, Zara's parent company Inditex posted strong sales gains. Low prices and a rapid response to fashion trends are enabling it to challenge Gap, Inc., for top ranking among global clothing vendors. The improved results highlight how Zara's formula continued to work even in the downturn. The chain specializes in lightning-quick turnarounds of the latest designer trends at prices tailored to the young — about $27 an item.
Louis Vuitton fashion director Daniel Piette described Zara as “possibly the most innovative and devastating retailer in the world.”
Inditex Group shortens the time from order to arrival by utilizing a complex system of just-in-time production and inventory reporting that keeps Zara ahead. Their distribution centres can have items in European stores within 24 hours of receiving an order, and in American and Asian stores in under 48 hours. “They're a fantastic case study in terms of how they manage to get product to their stores so quick,” said Stacey Cartwright, executive vice -president and CFO of Burberry Group PLC. “We are mindful of their techniques.”
Inditex's history in fabrics manufacturing made it good business sense to internalize as many points in the supply chain as possible. Inditex controls design, production, distribution, and retail sales to optimize the flow of goods without having to share profits with wholesalers or intermediary partners. Customers win by having access to new fashions while they're still fresh off the runway.