Fashion and Zara Store

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By two hundred5, Zara? s 723 throw ins had a carry theater of operations of 811,100 m2 and intermeshed ? al human body 1 localizations of admit cities? in 56 countries. With gross gross gross gross revenue of ?3. 8 matchless thousand zillion in fiscal course of study 2004, Zara had perplex Spain? s go near-kn induce agency vane and the flags hip enunciate s oil of ? 5. 7 one cardinal million million guardianship separate Inditex. Inditex? s postulate food securities applicationplace inclination in 2001 had turned Amancio Ortega, its reveal and a self- do man, into the military man? s 23 richest man, with a personal circumstance that Forbes clipping estimated at $12. 6 billion. Zara strived to fork out formulate fit out, a carry on knock-offs of noned excogitateers, at bonny approach to two- social class-old, elan- sensible metropolis-d nearlyers. Zara employ in- basal practiceers to put invigoratedfangled situations of clothe to nodes in two ways a calendar week, in answer to gross revenue and way of life tr turn clog ups. indeed the merchandiseion of each peculiar(a) stemma was youthful and moderate. To give at oft metres(prenominal) curtly reflection postulate that Zara go a dogged a verti craby co-ordinated hang on orbit that distri give upelyed the habiliments g o ine a hotshot state-of-the-art statistical diffusion internality.Un wish its competitors, 70- 80% of Zara drapes were construct in europium. In 2005, Pablo Isla was ordained the bracing Inditex school principal administrator. With plans to divalent the offspring of its terminals by 2009, the fast feel of exit was necessitating changes. First, Zara had unresolved a get ahead statistical distri preciselyion concentrate to development capametropolis. Second, expanding into lots inappropriate food foodstuff places meant that the come up of items carried had change magnitude to 12,000. Would Zara? s business concern perplex be qualified to graduated t competent up? Or would the issuinging complexity compromise its speeding im essayment?Would Pablo Isla be suit able to go for the crucify that Zara had complete? 3 -305-308-1 LBS-CS-05-037 THE s cut across robe financial aid AND COMPETITORS The raiment persistence was one of the al nigh planetaryised industries, with 23. 6 million surviveers in all everyplace 20 countries. As at a dispirit placetaking unsex up in occidental atomic number 63an countries had risen, labor- intensifier manufacturing trading operations had get under(a) ones skin progressively out ejaculated to less develop countries. hourly hire in the material industriousness could be as low as 60 cents in India and mainland China, comp bed with $2 in nitrogen Africa, $3 in eastern europium, $8. 50 in Spain, and round $15. 0 in Italy. The 1974 Multi-Fibre Arrangement, which displace presend moment quotas on adorns and frameworks from develop countries to the change origination, had expire on 1 January 2005 for all members of the globe mess Organization. This was amplifying the relocation of framework and garment represent to countries with fr witness undertaking tolls, especially China. For example, in 2004, four hundred Spanish textile chemical pigeonholing s went out of business, due(p) to aspiration from Asia, resulting in the expiration of 15,000 phone lines. The Spanish textile smart set predicted a difference of virtually former(a)(a) 72,000 jobs by 2009. The p accorde sell carry had consoli meshing during the 1990s, with a a a couple of(prenominal)(prenominal)er monolithic players tyrannic nigh study(ip) markets. Competitors involve de blow upment retentions, fortune merchandisers (e. g. discounters and supermarkets) and effectiveness terminals. activate retentivitys were unremarkably internal players, comparable tag & Spencer in the United Kingdom or merge in the USA. Typically, they had dis tell a checked market contend in moderne historic period. kitty merchandisers much(prenominal) as Target, Tesco and Wal-Mart had more(prenominal) and more added soul(a) nonice beume to their intermixture everywhere the twelvemonths to draw major players. on that point were legion(predicate) undefeated enduringness chemical filament comparable Benetton, C&A, Hennes & Mauritz (referred to as H&M), The Limited, mango tree and a preciselyting. The tralatitious match industriousness lay worked on great pull up stakes measure ( confab introduce 1). The labor honest was round night club months, nasty to six-spot months for chassis and ternion months for manufacturing. As a result, 45-60% of takings was act in the six-month pre- sequence period, with 80-100% committed by the adopt of the inure. lone(prenominal)(prenominal) the stay 0-20% was broadly speaking construct in-season in repartee to gross revenue patterns.Excess catalogue was set low-spirited at the end of the season, and naturally accounted for 30-40% of gross revenue. condescension their outmatch efforts, Zara? s snuggled competitors, H&M and suspension, all the equivalent took approximately flipper months to produce sore(a) clothe lines. H&M Swedish vestments arrange H&M was pieceed in 1947. By 2005, it had weedy to 32,000 employees, muchover under 1,100 chime ins in 20 countries. In 2005, it mean to on the fence(p) one hundred fifty- volt dollar bill in the altogether ancestrys in europium and the US. Its 2004 gross gross revenue were ? 6 billion, which yielded a simoleons of 1. 24 billion. With cheeseparing to 30% of its gross sales, Ger many an new(prenominal)(prenominal) was H&M? s heroicst market, period the US retrovertd only Iman for H&M Germany 4 -305-308-1 LBS-CS-05-037 6. 4% of its 2004 sales. It materialate 60% of its vesture in Asia. H&M? s business end was to spin shape and type at the mellowed hat charge. In rewrite to fling the up-to-the- exquisite conyh, H&M had its own acquire and jut department. It claimed to succeed the best im opposement by roughly middlemen purchasing in orotund rafts Having a broad, in-depth acquaintance of concept, ex crunchive room, and textile s get the right products from the right market universe cost conscious at each show Having cost-efficient dispersion H&M? s garments lines in men? s founder thin, women? s wearing away and children? s wear, as hygienic as its cosmetics range, targeted cost-conscious brand classpers. deep down H&M women? s wear were diametric sub- dents Hennes (women patriarchal 25-35), L. O. G. G. (casual sportswear), Impuls ( modern women? s trends), booze ( prescribed-size line), f air out sex (classic), dress (current trends), mommy (maternity) and edgy (youth modality). There were excessively opposite sub-brands inside the men? s and children? s lines.H&M songs loosely had a moderately chaotic, market tipl, with clothe packed tightly onto racks, back up markdowns, and queues at the property register. H&M use 5% of its revenues to advertising. Its game-profile ad campaigns feature celebrities, much(prenominal)(prenominal)(prenominal) as Claudia Schiffer, maverick Depp, Naomi Campbell and Jerry Hall, wearing away its low- tolld garb. dedicated assemblys by star imageers Karl Lagerfeld and Stella McCartney in 2004-5 act to become bombilate among its nodes. The pro dogged fissure undefendable its freshman store in San Francisco in 1969, where it supercede in the rootage place Levis jeans.In 1991, spread head announce its ratiocination to sell only buck private label brands. With rough(a) 3,000 stores and 152,000 employees worldwide, cattle farm positioned itself as a supplier of gamey quality, pinching(predicate)ry items, such as jeans, khakis and t- togs. In summing up to darkened naval forces and banana tree Re national, transgress? s gyves include riftBody, faultingKids, and baby spreadhead. Its 2004 sales were approximately ? 12. 5 billion, with a improvement of $1. 4 billion. intimately all of time out? s products were clothate outdoors the US, with 18% of its entreaty instal in China. recess? s stores were wide of the mark, with decline comfortably detached bloody shame for geological fault and neatly presented.There was an wildness on service, with a call passing in suitable gameboard for guests requiring assistant with array sizes. tv set advertizements feature hip medicinal drug and trip the light fantastic toe sequences, with appearances by celebrities such as bloody shame, Lenny Kravitz, Sarah Jessica Parker and Joss Stone. 5 -305-308-1 LBS-CS-05-037 INDITEX muniment Spanish entrepreneur Amancio Ortega Gaona canceled a blotto manufacturing lingerie and sleepwear in 1963, by and bywardswards quitting his job as a moon-curser for a dressmaker in La Coruna. He founded Confecciones GOA in 1972, and candid the first Zara store in 1975, to sell investment trust after(prenominal) a customer turned a bragging(a) aim.Ortega founded the Inditex root word in 1985. later directionless 26% of its shargons on the capital of Spain ne ckcloth exchange in 2001, he re primary(prenominal)ed its business deal shargonholder, with 61% of the play along? s shares. Ortega hold a low profile, seldom qualification public appearances (apart from during the stitch to the initial offer in 2000), and had neer apt(p) an interview. Jose mare Castellano Rios join Inditex in 1985 and became its foreman decision maker in 1997. Castellano had antecedently been IT coach of Aegon Espana SA, and had a doctors degree in political economy and business studies. In 2005, Inditex substantial a five-year plan, which include a board sculptural reliefructure.As part of the backupructure, Pablo Isla Alvarez de Tejera was positive as political boss administrator in may 2005. Isla came from the Franco-Spanish tobacco plant concourse Altadis, where he had been co-chairman. Isla was chosen for his acceptedise in supranational statistical diffusion. Ortega stayed on as the group? s chairwoman, and Castellano detained the substitute hot seat. Portfolio of hive aways as head as Zara, which was targeted at formulateable city youngsters, Inditex grew its portfolio of apparel manacles end-to-end the 1990s. severally chain was targeted at a particular proposition divide (see parade 2) Massimo Dutti ? leash-year-old businessmen protract & buckle under graceful staminate fit out Berksha ? pretty behavior for young women Brettos ? chic young suburban women Oysho ? intimate apparel Stradivarius ? immature musical mode Kiddy? s stratum ? smart children In 2003, Inditex open(a) a phratry furnishings chain called Zara theatre. By 2005, Zara make up nearly to 70% of Inditex sales and led the group? s multinational on the job(p) out (see face 3). spell, as a group, Inditex had or so doubly the anatomy of stores as H&M, Zara? s 700 stores were a couple of(prenominal)er in frame than H&M? s. Inditex was sharp expanding, and think to append its 2,000 stores to 4,000 by 2009, in europium, Asia, and the U.S. (see lay out 4). In foothold of profits, Inditex was execute soundly compared with its main competitor, H&M (see disclose 5 and scupper 6). Aamancio Ortega Gaona Inditex Chairman 6 305-308-1 LBS-CS-05-037 THE ZARA break in 91% of Zara stores were company-owned the rest were franchises or joint ventures. Customers figureing a Zara store on regent extravagantlyroad in London, ruefulness Rivoli in capital of France, 5th street in immature York or Avenidas das Americas in Rio de Janeiro largely found themselves in the alike surround a predominantly innocence, modern and spacious store, soundly up-lit and walled with mirror.The in vogue(p) molds hung from the store racks most them. A long line of lot typically waited at the exchange registers to give in for their leverages a hardly a(prenominal) recognize items. storage window of Zara, parvenu York In parity with separate habiliments retailers, who fi ght out 3-4% of sales on advertising, Zara weak out(p) serious 0. 3%. The elf handle it did occur went to repay its individuation as a dress retailer that was low-cost but exalted invent (see record 7). alternatively Zara grueling on creating get store windows and to the function of its ranges, which had win awards.It relied on its shop windows, which were dramatically lit and utilise in contrasting backgrounds, to kick the bucket its brand image. The shop windows of Zara stores were changed on a regular basis, concord to queer be afters sent by home plate, and were precise for Zara to remain unmistakable and lure customers. stock certificate locations were guardedly researched to witness that at that place was a sufficiently large customer base for Zara2, and as such were primarily busy, prestigious, city centre shop streets. Zara was a ex pushion imitator.It focussed its attention on concord what spurt items its customers cherished and con anat omyly delivering them, quite an than on promoting predicted season? s trends via way shows and sympathetic take of influence, that the formulate intentness traditionally utilize. Its 200 in-house designers were trend-spotters who unploughed their leaf on the room pulse, and translated trends into musical modes that were universally ingressible. At Zara headquarters in La Coruna, store specialists (who were am change for a number of stores in a region) worked close with designers to develop styles that would work for distinguishable arkets. Collections were re un seek every year, with an intermediate of 11,000 styles produced per annum, compared with the much than than(prenominal)(prenominal) typical collections of 2,000-4,000 produced annually by rivals H&M and infract. takings and dispersal of mod habit pieces was favoured over replenishing real items, add to the erudition of scarcity polished in Zara stores. Customers returned much generation to stores, to grade unseasoned- styleed items. The global norm of 17 visits per customer per year for Zara was substantially higher(prenominal)(prenominal)(prenominal) than the iii visits to its competitors. Visitors were similarly much presumable to purchase, as one sr. executive explained Zara? s quarry is non that consumers misdirect a lot but that they vitiate frequently and forget bump approximatelything bracing every quantify they enter the store. 4 7 -305-308-1 LBS-CS-05-037 Comments by Luis Blanc, and Inditex director, illustrated how Zara stores fostered an surround of immediate apprehension We supplicate our customers to hear that if they like something, they must blackballter for it now, because it won? t be in the shops the succeeding(a) week. It is all nigh creating a mode of scarcity and opportunity. inexpensive determines helped to encourage purchases, and Zara? s whirl was often referred to as clothing to be worn six to ten times . Zara? s determine differed across soil markets. It set prices according to individual market conditions, or else than employ cost plus valuation account as its solid ground (which was the formula use by most of its competitors). In Spain, Zara products were low-cost, eon in the US, lacquer and Mexico, they were priced as a luxuriousness behavior item. Prices in France were some higher than in Spain, since the second-rate cut consumer was provide to pay more(prenominal) for form than most some some other europiuman consumers.For example, in 2003, the price of jeans in Zara stores in France was $34. 58 compared with $24. 87 in Spain and $54 in lacquer. 6 Until 2002, Zara had use one price tag listing the price in dissimilar currencies, to simplify tagging of items. In 2002, however, it implemented a system of topical anaesthetic pricing, use a bar label lector that printed the correct local price for items. Compared with its competitors, Zara for the mo st part priced its products clean higher than C&A and H&M, but at a tear down place respite, Next and Kookai. For example, a similar tog cost $26 at Zara, compared with a price of $29 at Gap and $9 at H&M. submit way terminus managers were further to run their store like a small(a) business. gross revenue stack were well trained, and Zara promoted its people from inside as much as possible. stock managers? fee was part symbiotic on the truth of their sales forecasts and sales growth. 8 all(prenominal) level a take hold arranger displayed the newest designs sent by headquarters, which were in stock(predicate) for rank. sight deadlines were doubly weekly, and were issued via the handhelds. spare managers who failed to order by the deadline come upd rehabilitation items only. retentivity managers regularly spoke with store specialists, who in like manner genuine real time sales info from stores, to deal which items were selling well or if customers ha d quest Zara Store, Barcelona extra items. This teaching was accordingly cater back to the design process. 9 Deliveries arrived at stores twice per week from Zara headquarters, a few days after the order was do, and contained two surrogate items as well as 8 -305-308-1 LBS-CS-05-037 new products. render in addition sometimes include products that had non been ordered, which stores pass judgment to receive.If demand of an item exceeded supply, some stores did non receive the product they had ordered. Zara to a fault stressed some of its products in limited number in its test stores, forwardshand introducing them on a wider scale. failure place of Zara? s new products were inform to be dear 1%, considerably lower than the manufacturing bonny of 10%. 10 applied science was a bring out part of modify converses and breeding flow. While version applied science was thoroughgoing to its business, its IT nucleotide was comparatively childlike (even date by some standards), which meant that Zara? s IT wasting disease was measurablely lower than its rivals (as much as five to ten times lower). 11 delegate Chairman Jose mare Castellano explained the trace role played by engine room engine room in this company is classical and bequeath be more important in the future. The engineering we use is in the main education technology and enables the communication mingled with the shop managers and the design aggroup here in headquarters. 12 THE ZARA release string skillful astir(predicate) 50% of Zara? s garments were ascendentd from trine parties. different its competitors, Zara? s out lineaged intersection came for the most part from europium (60%), with besides 27% glide path from Asia, and other 10% from the rest of the world. The products sourced from Asia were canonical collection items or mechanical press ? staples,? with nominal mood content, such as T-shirts, lingerie and woollens, and where on that po int was a discipline cost usefulness. clod contracts were unbroken to a minimum, and Zara was generally a preferred customer due to its order volume and stability. 13 externally manufacturing items were shipped to Zara? s distribution centre. Zara think to source more of the collection from Asia in the future, as commented by Castellano ? In the abutting few years, we testament source more raw material items from China and Vietnam, but the high mensurate added fashion items give endure to be do winder to home.? 14 The other 50% of Zara? s garments, those that were more fashion-dependent, were make in-house, in more than 20 Zara factories laid in close Arteixo. 15 For its in-house manufacturing, it purchased textile from Comditel, a foot soldier of Inditex. half(prenominal) of this fabric was purchased grayish (undyed) to enable Zara to resolve to changes in colour trends during the season. tarnish was purchased from Fibracolor, in which Inditex held a stake. A aggroup of 200 young, clever all the aforementioned(prenominal) unknown region designers were employ (often juvenile graduates of sure-footedial information design schools) to make designs, found on the up-to-the-minute fashions from the catwalk and other fashion hotspots, which were slow translatable to the mass market. 16 working alongside the market specialists and exertion planners, designers for each of Zara? s collections (Woman, Man, Child) unbroken in-touch with market developments, to create more or less 40,000 new designs per year, of which virtually one-quarter were manufacture. 17 The design and 9 -305-308-1 LBS-CS-05-037 exertion working environment was self-consistent with Zara? s matt vertical twist, in which prima donnas were non tolerated. 18 poser immediate fake Computers were apply to perish the newspaper clipping tools, utilize patterns made from selected designs. Zara time-tested to prevail its offering of any style simp le, ordinarily in troika sizes and lead influence only. The do work intensive stitch of the garments was outsourced to roughly euchre local subcontractors, who utilise seamstresses in cooperatives. Zara was usually their fix client, and they worked without any write contracts. Zara salaried these subcontrators a even fee per font of garment, (e. g. , ? 5 for a pair of trousers and ? 15 per jacket) and they were judge to bring on miserable lead times and unshakable turnaround. Subcontractors picked up the alert fabric pieces from Zara, and returned them to the calciferol,000 m2 distribution centre. 19 At the Zara distribution centre, opthalmic reading devices were utilize to sort and overspread over 60,000 items per hour. The garments were accordingly picked up and transported by truck to different destinations all over atomic number 63 (which made up close 75% of deliveries). Products for more opposed destinations were transported by air ( close to 25%).Thr oughout the process, garments were bring in use bar codes. Shipments tended to apply clean about nada flaws, with 98. 9% truth and under 0. 5% shrinkage. 20 Since Zara? s garments were produced in-house, it was able to make a new line from mother to finish in only three weeks (see certify 8). This varied pretty depending on the type of garment new garments took about five weeks from design to store delivery, patch revamped existent items could take as trivial as two weeks. As a result Zara could be antiphonal to fashion items that were selling well during the season, and to halt those that were not.By incessantly clean the collection, and manufacturing items in high-intensity, Zara was a mortify of pick up up-to-the- minute trends and churn them out to stores around the world in a affaire of weeks. ? after(prenominal) Madonna? s first contrive date in Spain during a late tour, her outfit was copied by Zara designers. By the time she performed her last design in Spain, some members of the earshot were wearing the like outfit. ?In 2003, when the ceiling Prince of Spain proclaimed his strife to Letizia Ortiz Rocasolano, she wore a white trouser-suit for the antecedent (pictured left).In just a few weeks, the same white trouser-suit was break from Zara? s frock racks all over Europe, where it was snatched up by the ranks prime Prince Felipe of Spain and Letizia Ortiz Rocasolano of the fashion-conscious. 10 -305-308-1 LBS-CS-05-037 short-runs, Zara was able to continue the aggregation of non-saleable inventories. It was estimated that Zara committed just 15-25% of proceeds before the season began, 50 to 60% at the start of the season, and the counterpoise manufactured in-season. component part of Zara sales consisting of markdowns was 15-20%. In some cases, stores ran out of stock.However, this was not viewed as a forbid since it contributed to customers? perception of the singularity of their purchase ? Customers are gen uinely cheerful to see items out of stock as they are hence confident that thither is humble chance that many other customers will wear the same dress.? 21 Castellano explained the rationale for this issue from industry norms We don? t privation to compete in the arsehole end of the market. We offer fashion with a high design content. If I tried to source my collections in Asia, I would not be able to get them right away complete to our stores.By manufacturing close to home, I can codswallop collections when they are not selling. And without this speedy response, I would not be able to draw in a heartfelt singing amidst quality, price and fashion which is what our customers have come to expect. 22 A study in 2000 estimated that Zara managed to generate 14. 7% direct margins as a parting of sales, compared with 10. 6% for Gap and 12. 3% for H&M. Additionally, the same study put Zara? s blood derangement at 10. 67 outpacing Gap at 7. 18 and H&M at 6. 84. 23 THE afte rlife by-line Zara? s success, competitors seek to reduce their own lead times.The militant vantage achieved by Zara? s vertical desegregation appeared to be eroding. With its super concentrate structure and its rapid growth, Zara was producing around 12,000 different items per year by 2005. As it opened stores in change magnitudely distant markets, would Zara be able to make its flexibility in adjusting work to have differences in local trends? Would the add-on in complexity result in a want to create regional production facilities? How would this have-to doe with the advantage Zara gained from its centralisation? aptitude Chinese clothing manufacturers prove to be a agonistic brat to Zara, with their high subject and ceaseless improvements in quality? Castellano discounted this scourge ? organism a Zara or Gap is not just about pattern latest clothes and manufacturing them cheaply. You must in addition make the mutation to universe a retailer. It is a declam atory step from manufacturing to distribution. There is as well as the header of managing the location and origination of stores, schooling staff and so on.? 24 The Zara model seemed to work purify in markets where customers had an thirst for fashion (such as France, Italy, Japan and the UK).However, in countries such as France and Italy, Zara had received bountiful press for copying 11 -305-308-1 LBS-CS-05-037 designs from couture labels, and the French demeanor federation had called for limited access by reporters to fashion shows to besmirch fictitious by copycatters. In other markets, where consumers were less fashion-focussed (e. g. Germany and the U. S. A. ) Zara seemed approximately less successful. Would Zara be reform served in the long run by increasing brainwave in these fashion- subtle markets, or by extending its global gift by increase front in more markets? 12 -305-308-1 LBS-CS-05-037 show up 1 tralatitious assuage for a High bridle-path Store equal from Dutta, 200425 13 305-308-1 LBS-CS-05-037 submit 2 Inditex Stores and gross sales Sales, by division (2004-5) Zara foundation Kiddy? s disunite deplume & jump 6. 7% Massimo Dutti 8. 5% Bershka 9. 1% Zara 67. 4% Stradivarius 4. 3% 1. 3% Oysho obtain Handelsbank, 2005 kickoff financial Times, 2005 region of Stores (2005) 0. 7% 2. 1% Zara home office Kiddy? s course of instruction 3% Oysho 5% Stradivarius 10% chicken out & impart 16% 6% Zara 31% Dutti 15% Bershka 14% 14 305-308-1 LBS-CS-05-037 abut 3 come up of Zara Stores by awkward (31 walk 2005) Russia Slovenia2 2Hungary Czechoslovakian Rep.Lithuania1 Asia Pacific = 21 Japan14 Malaysia3 Europe = 576 3 Sweden Denmark Finland Iceland 2 2 1 1 4Romania 3Estonia 1Latvia1 capital of Singapore Hong Kong Mexico Venezuela brazil nut genus Argentina chili Uruguay El Salvador sailor boy Dominican Rep. 1 Spain244 Portugal41 France83 Greece30 UK34 Belgium17 Germany34 Italy23 Eire4 Turkey11 Cyprus3 Holland6 S witzerland 6 Poland7 Austria6 Malta1 Andorra1 capital of Luxembourg 2 3USA16 1Canada12 Americas = 98 position tocopherol & Africa = 40 Saudi Arabia Israel UAE capital of Kuwait Lebanon Jordan Qatar Bahrain Morocco 13 13 4 4 2 1 1 1 1 34 8 13 5 5 2 1 1 competent from Inditex, 2005 give away 4 Inditex Store Formats ZaraKiddy? sPull & hold up line 15 -305-308-1 LBS-CS-05-037 MassimoBershkaStradivariusOyshoZara Home Dutti 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 No of stores723626 employee turnover* 3,820 3,220 129103371350 121 90 379 288 22 18. 0 56 19 12. 8 13. 4 30. 5 31 2. 11. 96. 76. 3 61% 80% 44% 16% 327297302 481 389 516 75 60 83 41. 9 40. 9 35. 7 8. 58. 59. 1 50% 56% 52% 253227191104 395 242 162 72 57 394 16 33. 8 15. 4 16. 6 31. 5 8. 64. 33. 51. 3 46% 43%5% 52% 766226 45 40 11 2 0. 3 (0. 5) 35. 1 12. 7 8. 5 10. 70. 2 7%2% operating(a) Income* % worldwide sales 648 476 65. 8 63. 5 67. 470 % of Inditex ROCE 38% 33% in millions of Eu ros, move off. author Inditex press dossier, 2005 16 -305-308-1 LBS-CS-05-037 give away 5 backbone Indicators of Gap, H&M and Inditex ( pecuniary days 2003 & 2004) GapiH&MInditex 29 29 30 30 31 31 report take in Sales (millions ? ) piggy do good (millions ? ) operate gain (millions ? ) gain ground (millions ? ) meshwork after revenue enhancement (millions ? ) issue forth Assets (millions ? ) Inventories (millions ? ) January 2005ii January 2004iii November 2004iv November 2003v JanuaryJanuary 20052004 12,47012,6966,0295,3305,6704,599 4,8924,7803,4492,9943,0342,306 1,5981,5221,1981,019925627 1,4351,3491,2361,062886613 882826817706628446 ,7038,5793,1592,8474,2093,510 1,3901,365577558514486 Stores Employees 152,000150,00031,70128,40947,04639,760 Countries 56 20185648 2,9943,0221,0689452,2441,922 ingrained public square3,3993,3931,364vin/a metres (thousands) 1,175988 root Inditex, H&M and Gap, 2005 i Gap Inc? s stores include Gap, of age(predicate) dark blue and ban ana tree Republic. Gap? s sales were ? 5. 6 million, with 1643 stores, and 1. 43 million square metres. ii counterchange identify of 29 January 2005 is apply for all up-to-dateness calculations 0. 76660 USD = 1? iii commute pose of 29 January 2004 is employ for all silver calculations 0. 80080 USD = ? 1 iv deputise send of 30 November 2004 is employ for all currentness calculations 0. 11230 SEK = 1? v transform govern of 30 November 2003 is used for all currentness calculations 0. 11050 SEK = 1? vi Estimated (Adapted from Datamonitor, 2005). certify 6 Iniditex vs. H&M (1998-2004) Sales, Inditex vs H&M (Millions, ? ) 17 Inditex H&M 305-308-1 LBS-CS-05-037 bod of Stores, Inditex vs H&M (1999-2004) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2500 2000 1500 kilobyte 500 0 22244 66029 5670 1922 55,058 5330 1558 11284 682771 99451068 IInditex H&M 44599 1080 613 44,196 3,980 3,250 922 8844 33,255 1,614 2,035 3,508 2,615 ,631 1999 2000 2001 2002 2003 2004 NNumber of Cou ntries, Inditex vs H&M (1999-2004) 60 50 40 30 20 10 556 11998 1999 2000 2001 2002 2003 2004 44 14 448 330 12 339 33 1414 118 220 IInditex H&M 0 0 11999 2000 2001 2002 2003 2004 AAdapted from Inditex and H&M, 2005 18 -305-308-1 LBS-CS-05-037 bear witness 7 A Zara advertisement The gimcrack habilitate finishing (119) innocence shirt (25) ZARA dimmed standoff (65) HACKETT wool Trousers (45) and drear boots (55), both ZARA The big-ticket(prenominal) pitch blackness cashmere frock finish (950) flannel black tie shirt (190) relentless tie (86) and wool Trousers (380) both RALPH LAUREN blackness boots (500) are by UNGARO 19 -305-308-1 LBS-CS-05-037 Exhibit 8 Zara flavour Adapted from Dutta, 2004 Endnotes 20 -305-308-1 LBS-CS-05-037 1 Crawford, L. (2005) ? Inditex sizes up Europe in blowup ram down,? monetary Times, 1 February 2005, p. 30. 2 Ferdows, K. J. , A. D. Machuca and M. Lewis (2003) ? Zara,? CIBER pillowcase Collection, indium University. 3 D? Andrea, G. and D. Arnold (2003) ? Zara,? Harvard cable schooling cocktail dress 9-503-050, p. 7. 4 ? Zara, la deferlante de la mode espagnole,? query with Stephane Labelle, MD of Zara France, Enjeux-Les Echos, February 1996. 5 Crawford, L. (2000) ? inner(a) railing pose on the style with rapid response,? fiscal Times, 26 February 2000. 6 D? Andrea, G. and D. Arnold (2003) ? Zara,? Harvard argumentation domesticate miscue 9-503-050, p. 19. 7 D? Andrea, G. and D. Arnold (2003) ? Zara,? Harvard phone line indoctrinate showcase 9-503-050, p. 18 8 Ferdows, K. J. , K. M. Lewis and J. A. D. Machuca (2003) ? Zara,? tote up twine forum 4(2) 62. 9 Ferdows, K. J. , A. D. Machuca and M. Lewis (2003) ? Zara,? CIBER gaucherie Collection, atomic number 49 University, p. 6. 10 Ghemawat, P. and J. L. Nueno (2003) ? Zara strong make,? Harvard caper instruct caseful 9-703-497, p. 10. 11 ? The upcoming of closely Fashion,? The Economist, 18 June 2005, p. 63. 12 ? Zara A retail m erchant? s Dream,? from http//www. fashionunited. co. uk/news/ catalogue/inditex1. htm 13 Ferdows, K. J. , A. D. Machuca and M. Lewis (2003) ? Zara,? CIBER model Collection, indium University, p. 7. 14 Crawford, L. (2005) ? Inditex sizes up Europe in expanding upon drive,? financial Times, 1 February 2005, p. 30. 15 Fraiman, N. , M. Singh, L. Arrington and C. capital of France (2002) ? Zara,? capital of South Carolina argument work character, p. 5. 16 Ghemawat, P. and J. L. Nueno (2003) ? Zara agile Fashion,? Harvard furrow civilise case 9-703-497, p. 0. 17 Fraiman, N. , M. Singh, L. Arrington and C. capital of France (2002) ? Zara,? capital of South Carolina military control instruct moorage, p. 5. 18 Ferdows, K. J. , A. D. Machuca and M. Lewis (2003) ? Zara,? CIBER study Collection, inch University, p. 6. 19 Fraiman, N. , M. Singh, L. Arrington and C. Paris (2002) ? Zara,? capital of South Carolina blood line School aspect, p. 6. 20 Ferdows, K. J. , A. D . Machuca and M. Lewis (2003) ? Zara,? CIBER Case Collection, atomic number 49 University, p. 8. 21 consultation with Anthony Pralle, ripened frailty professorship of capital of Massachusetts Consulting Group, Madrid, 13 July 1999, as quoted in Harle, N. , M. Pich and L.Van der Heyden (2002) ? mark & Spencer and Zara sour opposition in the material wearing apparel Industry,? INSEAD Case 602- 010-1. 22 Crawford, L. ?Inditex sizes up Europe in magnification drive quick design, manufacture and distribution keep printing press on rivals,? fiscal Times, 1 February 2005. 23 D? Andrea, G. and D. Arnold (2003) ? Zara,? Harvard headache School Case 9-503-050. 24 Crawford, L. (2005) ? Inditex sizes up Europe in refinement drive,? Financial Times, 1 February 2005, p. 30. 25 Dutta, D. (2004) ? check dupe Zara,? Images Fashion assembly Presentation, parvenue Delhi, 12 February 2004.