The sixth-richest man in the world worked as a runner in a Spanish tailor’s rather than studying for an MBA. He hates flying, his only hobby is tending to his allotment, he supports Deportivo La Coruña and he has completed the Camino de Santiago pilgrimage four times. Amancio Ortega might be a billionaire, but he’s about as far from the stereotype as you can imagine. Ortega learned the basics of his craft on the bottom rung of the manufacturing industry, honing a sense of intuition that has seen him create a low-cost fashion empire, the most well-known brand of which is Zara. The company sells fashionable garments in line with the latest trends from the big brands, but at affordable prices that make it possible for customers to mix up their wardrobe whenever they want.
From tailor’s assistant to gown manufacturer
Ortega’s origins are as humble as they come. He was born in 1936 in Busdongo, a small village in the Spanish province of Leon, where his father worked on the railways and his mother took care of the home. He learned everything he needed to set up his business at Gala, a small shirt shop in La Coruña, where he worked as a gopher from the age of 14. He instantly saw that customers wanted clothes that were affordable and allowed them to change their style often – something that was difficult back then, due to the many middlemen working in the packaging and distribution side of the industry.
Ortega embarked on his first experiment in simplifying the production process and slashing prices with the help of his siblings and, later, his wife. They began manufacturing gowns, maintaining the same level of quality as offered by other companies, but selling them at a much lower price. The owner of the tailor’s where he worked as the runner decided to take a chance and place an initial order. Ortega used the money to buy a garage and a sewing machine, so he no longer had to sew by hand and could guarantee quick, on-time deliveries. The price of the end product was established at the start, with production costs decided afterwards. The secret to the future success of Zara was in place.
The birth of a company of his own
Ortega soon expanded from gowns to other garments such as shirts, sportwear and pyjamas. He recruited housewives as his workers, giving them offcuts to stitch at home before sending back finished products ready for sale. In 1963, he set up Confecciones GOA (the letters are his initials, backwards), while his first store – Sprint – was opened in 1972. Spring lasted less than seven years before it was forced to close, but the idea of creating products in-house, without advertising and intermediary costs, was a sound one that would be carried forward by the first Zara store, opened in 1975 on the main street in La Coruña. In actual fact, the store was supposed to be called “Zorba”, but there was already a bar in the city with the same name, so Ortega hastily adjusted it, salvaging at least a few of the letters from the already-made sign.
The shop brought in new clothes every two weeks or so. This was all the time required to design, produce and distribute a new collection, compared with the six months taken by Ortega’s competitors – and Ortega had no proper warehouse, either. In 1978, he opened his first store in Madrid, and in the years that followed the chain spread across Spain. Zara’s first logistics and distribution hub opened in 1984, and there are now 900 Zara stores in total, distributed across 73 countries around the world.
The international step up
Virtually nothing is known about Ortega’s private life. He has never given interviews and there are only a few photos of him – it’s an approach that encapsulates his philosophy, which he once summed up thus: “You should only appear in the newspapers three times: when you’re born, when you get married and then when you die.” There is no doubt, however, that Ortega’s wife – Rosalía Mera, who died in 2013 – played a key role in his success. Mera worked as a designed in the same store in which the young Ortega had taken his first steps in the industry, and it was thanks to her that Ortega moved onto the international stage by setting up the Inditex Group (Industrias de Diseño Textil Sociedad Anónima) as a holding company for Zara and its production facilities. Over the years, additional brands have been set up or incorporated under the Inditex umbrella, including Massimo Dutti, Pull and Bear, Bershka, Stradivarius, Oysho, Shkuaban, Uterque, Tempe and Zara Home.
Zara opened its first store outside of Spain in Oporto (1988), New York (1989) and Paris (1990). The company floated on the Stock Exchange in 2001, while in 2005 Pable Isla was named CEO of Inditex. And when Ortega decided to give up his role as chairman in 2011, Isla took on this role as well as that of CEO.
Isla’s appointment delayed the rise of Ortega’s daughter Marta (from his second wife), but it is expected that she will take the reins of Inditex at some point in the next few years, having worked at the company for more than a decade. Time will tell whether or not the new leadership will be able to maintain the spirit of the group, which still sticks to Ortega’s plan of sharing 10% of profits among employees – part of the reason that Zara continues to be a favoured case study at all the leading business schools.