On January 15, 2002, José María Castellano
Ríos, chief executive officer of the Spanish
apparel company Inditex, stepped to the
podium at the Jacob Javits Convention Center
in New York City to accept the International
Retailer of the Year award from the National
The year just closed had
been a tumultuous one on the international
scene, and for retailers it had been a down
Retail consolidations and bankruptcies
were occurring at a fast pace.
and its flagship company Zara had managed
yet another year of impressive growth and
Indeed, 2001 had in
many respects been a landmark year for
Inditex, for founder Amancio Ortega Gaona
and for Castellano.
History of Zara
Amancio Ortega Gaona, a native of Galicia,
had worked as a clerk at a ladies’ apparel
retailer before starting his own housecoat
manufacturing business in 1963.
the first Zara store in La Coruña in 1975; by
1989, there were 82 Zara stores in Spain, and
Ortega began international expansion with
Zara stores in Portugal, Paris and New York.
Zara’s parent company Inditex took on 4
Professors Nelson Fraiman and Medini Singh of
Columbia Business School, together with Linda
Arrington and Carolyn Paris, prepared this case as
the basis for class discussion rather than to
illustrate either effective or ineffective handling of a
This case was prepared under
the auspices of the W. Edwards Deming Center.
was sponsored by the Chazen Institute and the
Center for International Business Education.
The authors wish to thank José María Castellano
Ríos of Inditex and Luis Bastida and Francisco
González of BBVA for making this project possible.
Copyright©2002 by Columbia Business School.
other formats, Pull & Bear, Massimo Dutti,
Bershka and Stradivarius,
and in 2001 had
launched Oysho, an intimate apparel and
See Exhibit I for selected
The brand names Zara,
Pull & Bear, Bershka and Oysho were invented,
generic names suitable for “export”; and by
fiscal 2000, over half of Inditex sales were
During 2000-2001, Inditex received widespread
favorable press and analyst coverage, touting
Inditex’s success and attributing it to Zara’s
unique integrated business model.
has led to Zara being described as “possibly the
most innovative and devastating retailer in the
world” by Daniel R. Piette, Chairman and CEO,
LV Capital. Inditex made an initial public offering
of stock in May 2001,
and was by then the
world’s third largest clothing retailer.
stake in Inditex was worth billions, but Ortega
Pull & Bear (6.6% of 2000 sales) was launched in
1991 as a men’s basic, casual line, with women’s
apparel added in 1998.
Inditex purchased an interest
in Massimo Dutti (7.8% of 2000 sales), a men’s shirt
company, in 1991 and acquired 100% in 1995, in the
meantime evolving it into a more classic and upscale
line for men and women.
In 1998, Bershka (5.2% of
2000 sales), a “club” look line for teenage girls, was
launched, and a 90% interest in Stradivarius (2.8% of