A go ldman analyst has described the chain as armani

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Unformatted text preview: a’s duds lo o k like high f ashio n but are co mparatively inexpensive (average item price is $ 27, altho ugh prices vary by co untry).C. Ro hwedder, “Zara Gro ws as Retail Rivals Struggle,” Wall Street Jo urnal, March 26, 2009. A Go ldman analyst has described the chain as “Armani at mo derate prices,” while ano ther industry o bserver suggests that while f ashio ns are mo re “Banana Republic,” prices are mo re “Old Navy.”J. Fo lpe, “Zara Has a Made-to -Order P lan f o r Success,” Fo rtune, September 4, 2000. Legio ns o f f ans eagerly await “Z-day,” the twice-weekly invento ry delivery to each Zara lo catio n that brings in the latest clo thing lines f o r wo men, men, and children. In o rder to understand and appreciate just ho w co unterintuitive and successf ul Zara’s strategy is, and ho w techno lo gy makes all o f this po ssible, it’s impo rtant to f irst examine the co nventio nal wisdo m in apparel retail. To do that we’ll lo o k at f o rmer industry leader—Gap. Gap: An Icon in Crisis Mo st f ashio n retailers place o rders f o r a seaso nal co llectio n mo nths bef o re these lines make an appearance in sto res. While o verseas co ntract manuf acturers may require hef ty lead times, trying to guess what custo mers want mo nths in advance is a tricky business. In retail in general and f ashio n in particular, there’s a saying: invento ry equals death. Have to o much unwanted pro duct o n hand and yo u’ll be f o rced to mark do wn o r write o f f items, killing pro f its. Fo r years, Gap so ld mo st o f what it carried in sto res. Micky Drexler, a man with a radar-accurate sense o f style and the ico nic CEO who helped turn Gap’s butto n-do wn shirts and khakis into America’s business casual unif o rm, led the way. Drexler’s team had spo t-o n tastes thro ugho ut the 1990s, but when sales declined in the early part o f the f o llo wing decade, Drexler was lef t guessing o n ways to revitalize the brand, and he guessed wro ng—disastro usly wro ng. Chasing the yo uth market, Drexler f illed Gap sto res with miniskirts, lo w-rise jeans, and even a much-ri...
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