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INDITEX, a european SME success story

Virginia Melgar, Deputy Director for External Relations at the Office for Harmonization of the Internal Market (OHIM), spoke at the ECAP II-sponsored workshops for SMEs in Thailand and the Philippines. She picked the story of INDITEX Group from Spain to demonstrate how innovative design and trade marks helped a small family-owned business grow into a solid international firm.

INDITEX has introduced a kind of revolution in the fashion sector that prompted other companies to rethink their strategy. INDITEX Group?s chairman and founder Amancio Ortega Gaona made his modest start working at the age of 14 as a gofer in a shirt store in La Coruna, Galicia. From the first venture into his own business in 1963, Mr Ortega reached a first milestone in 1975 with the opening of the first ZARA store in La Coruna. A decade later, he founded INDITEX as holding company for its various subsidiaries, paving the way for the Group?s expansion outside Spain. After opening the first store outside Spain in Portugal in 1988, the Group secured beachheads into the US and France with the opening of outlets in New York in 1989 and in Paris in 1990.

INDITEX Group launched the ?PULL & BEAR? chain of casual wear in 1991 and in the same year purchased 65% stake into Massimo Dutti Group, a high-end fashion concern, which it eventually acquired in full in 1995. Meanwhile, it continued the drive into the international market by opening a succession of stores in Mexico, Greece, Belgium and Sweden, respectively from 1992-1994.

The Group launched the Bershka chain targeting the younger female segment in 1998, when it also set up stores in Argentina, Japan, UK, Venezuela, Lebanon, UAE, Kuwait and Turkey. In 1999, INDITEX acquired STRADIVARIUS, making it the fifth chain of the Group, and opened its stores in new countries namely the Netherlands, Germany, Poland, Saudi Arabia, Bahrain, Canada, Brazil, Chile and Uruguay. In 2000, INDITEX built its headquarters in Arteixo, A Coruna, Spain, while opening stores in four new countries. The company was listed in the Spanish stock market in May 2001 with its IPO shares sold out the day it went public, the year when it added six more countries to its global footprint.

Today, INDITEX has seven different firms with seven different trademarks under its umbrella, with an income of over 1.6 billion Euro in 2001. It has 1,376 stores in 42 countries across the world. INDITEX success lies in the goodwill value of the Group?s trade marks: Zara for the middle-class segment, Massimo for the high-end, Pull&Bear for casual clothing line. The Group does not invest heavily in advertisement campaigns, but it focuses on investment in the ?image? of the shops. It focuses on delivering value for money, and the capacity to adapt to consumer?s tastes. The Group?s future looks promising, with its blueprint to establish presence worldwide, investing over 500 million Euros in the shops in 2002, while launching a new product line: women?s underwear.

Last Update: Mon 02 Feb 2004 - 09:26 AM
This publication has been produced with the assistance of the European Union. The contents of this publication is the sole responsibility of ECAP II and can in no way be taken to reflect the views of the European Union.
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