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Industria de Diseño Textil S.A. - Multiple Retail Formats in the New Century

Multiple Retail Formats in the New Century

At the same time as Inditex pursued its geographic expansion, it also began expanding beyond its flagship Zara retail format. The company launched the Kiddy's Class children's wear format as a subgroup of the main Zara concept in the early 1990s. In 1991, the company added an entirely new retail format, Pull & Bear, which began providing "urban" fashions. By the beginning of the 2000s, the Pull & Bear chain had grown to 300 stores in nearly 20 countries; it also produced its own offshoot format, Often, targeting the 20-to 45-year-old men's segment, in 2003.

Company Perspectives:

The Inditex Group is made up of almost a hundred companies dealing with activities related to textile design, production and distribution. Its unique management methods, based on innovation and flexibility, and its successes, have turned Inditex into one of the world's largest fashion Groups. Its vision of fashion—creativity and quality design together with a rapid response to market demands—have allowed for fast international expansion and an excellent response to its sales concept.

Inditex went upscale in 1991 when it bought 65 percent of the Massimo Dutti group. Inditex took full control of Massimo Dutti in 1995 and began building it into a chain of nearly 300 stores in 23 countries. While Massimo Dutti appealed to a more sophisticated men's and women's fashions market, the company targeted the young female market in 1998 with the creation of a new format, Bershka. That retail chain quickly evolved into a network of more than 200 stores operating in 11 countries.

Inditex continued adding new formats at the turn of the 21st century. In 1999, the company acquired Stradivarius, a youth fashion chain present in nine countries. In 2001, Inditex added its lingerie format, Oysho. In 2003, Inditex moved beyond the garment trade for the first time, launching its own home furnishings concept, Zara's Home.

Meanwhile, Inditex had begun a corporate evolution as well. As Ortega approached retirement, and no members of his immediate family appeared likely to succeed him in the business, the company looked to the public market to ensure its future. In 2001, Inditex listed its stock on the Bolsa de Madrid, one of the most successful initial public offerings of the year. Ortega's sale of more than 20 percent of his holding in Inditex made him Spain's wealthiest man, with a fortune estimated to be worth more than EUR 4.6 billion.

Inditex moved to a new corporate headquarters in Arteixo, outside of A Coruna in 2000. In 2002, the company began construction on a state-of-the-art logistics center in Zaragoza. At the same time, Inditex continued adding to its array of international markets, opening stores in Luxembourg, Iceland, Ireland, Jordan, and Puerto Rico in 2001; Switzerland, Finland, El Salvador, and Singapore in 2002; and Hong Kong in 2003. By mid-2004, Inditex's global operation spanned more than 2,000 stores, and its sales had neared EUR 4.6 billion ($5.1 billion), making it one of the world's leading clothing retailers.