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izanami
PopStar
Joined: Jan 27, 2004
Posts: 1037
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  Posted:
Aug 11, 2005 - 02:08 PM |
 
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| Post subject: Zara opening in Shanghai |
at Nanjing Road and Shanxi S. Road.
Too bad I won't be around! |
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Tell me what you eat, and I will tell you what you are.-- Brillat-Savarin |
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Madibaman
SuperStar
Joined: Dec 27, 2003
Posts: 1489
Location: Medicinal Planet
Status: Offline
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Aug 11, 2005 - 02:10 PM |
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When's that going to be? And you're leaving? |
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Earth is full. Go home. |
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Anniboodk
Fire-eater
Joined: Feb 27, 2004
Posts: 2788
Location: Copenhagen
Status: Offline
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Aug 11, 2005 - 02:12 PM |
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Yay! I love Zara, they have such cute and reasonable priced things. Guess Zara is really kicking into high gear in China, they just opened a few HUGE stores in HK. |
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Who was the first person to say, "See that chicken over there? I am going to eat the next thing that comes out of its butt." |
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GC
The Ginger Prince
Joined: Dec 01, 2003
Posts: 21544
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Aug 11, 2005 - 02:13 PM |
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can someone explain what Zara is? |
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You turned on the lights, Fuelled U boats by night, That's how you repay us, It's time to go home. |
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Madibaman
SuperStar
Joined: Dec 27, 2003
Posts: 1489
Location: Medicinal Planet
Status: Offline
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Aug 11, 2005 - 02:15 PM |
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An alpha zebra. |
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Earth is full. Go home. |
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wsl
SuperStar
Joined: June 23, 2005
Posts: 1595
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Aug 11, 2005 - 02:16 PM |
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is it convenience chain store? |
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wsl
SuperStar
Joined: June 23, 2005
Posts: 1595
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Aug 11, 2005 - 02:19 PM |
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haha it a brand of clothes. haha |
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Anniboodk
Fire-eater
Joined: Feb 27, 2004
Posts: 2788
Location: Copenhagen
Status: Offline
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Aug 11, 2005 - 02:20 PM |
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It's a clothing store, I seem to think they only sell womens' clothing. Mainly smart casual attire. |
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Who was the first person to say, "See that chicken over there? I am going to eat the next thing that comes out of its butt." |
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SirFiddler
Board Legend
Joined: Mar 30, 2004
Posts: 11500
Location: Very close to a bottle of chilled Boags
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Aug 11, 2005 - 02:20 PM |
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Quite decent brand of clothes. I have some jeans and jumpers from then I bought back home.
Not too cheap though...
When are they opening Iz ? |
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Beer...Soooo much more than just breakfast www.justbeer.cn |
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Anniboodk
Fire-eater
Joined: Feb 27, 2004
Posts: 2788
Location: Copenhagen
Status: Offline
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Aug 11, 2005 - 02:21 PM |
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It's in the same price range as Mango. |
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Who was the first person to say, "See that chicken over there? I am going to eat the next thing that comes out of its butt." |
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smurfette
PopStar
Joined: Nov 07, 2003
Posts: 1287
Location: smurf village
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Aug 11, 2005 - 02:23 PM |
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made in China? |
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statistically significant |
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izanami
PopStar
Joined: Jan 27, 2004
Posts: 1037
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Aug 11, 2005 - 02:58 PM |
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This is the business background of Zara, and I really respect this business because I love fashion and I love great businesses.
It is not cheap, but remains affordable considering that the designs are always relatively good and creative. However, it is losing is 'allure'. In the past, not many people in Asia have Zara items in their wardrobe. Now, like Mango, it is ubiquitous. So it loses some of its appeal. But still, a good addition to fashion-starved Shanghai.
Inditex sets its sights on textile expansion in Asia
AFP , MADRID
Monday, Mar 28, 2005,Page 11
"Inditex seems to have developed a format which works in every country it goes into."
a brokerage analyst
Chic fashion freaks all the way from Barcelona to Bangkok, La Coruna to Kyoto and Seville to Surabaya are lapping up the products of Spanish success story Inditex group, led by flagship outlet Zara.
This year is a key moment for Inditex and its competitors, January having seen the end of the international textiles quota regime, fueling fears of an explosion in Chinese exports.
European and US textile industries have been bracing for a flood of low-cost textiles from China since import quotas established under the 1974 Multi-Fiber Arrangement came to an end to open markets globally.
Though China is easily the world's largest exporter of clothing with 28 percent of the market, Inditex, which Thursday unveils its 2004 results, is effectively looking to carrying proverbial "coal to Newcastle" by targeting major retail expansion within Asia -- but making the bulk of the goods at home.
Two weeks ago the Zara fashion chain, the group's flagship, said it was to open two stores in prime sites in Jakarta in the second half of 2005, following an agreement with Indonesia's PT Mitra Adiperkasa TBK group.
Eight new stores are also on the cards for Japan, taking the total to 20, and Inditex, known for its "just-in-time" stock turnaround strategy, also has expansion into China and Thailand in its sights, just 30 years after first opening its doors in the western city of La Coruna.
"Japan is an important market for our development and we think we can successfully impose our model" on Asian markets, an Inditex spokesman told reporters.
The Inditex success story has seen the group mushroom to about 1,400 stores in 54 countries led by the Zara, Pull and Bear and Massimo Dutti brands, backed up by its Bershka, Stradivarius, Oysho, Zara Home and Kiddy's Class brands, wildly popular with youthful modish consumers.
"Inditex seems to have developed a format which works in every country it goes into. The business model is quite a centralized distribution system, feeding its stores," explained an analyst with a leading US brokerage.
"It tends to have fewer stores [than competitors] per country -- but in prestigious locations," the analyst added, noting the move into Indonesia.
"It's quite rare for a clothing retailer to have real international presence -- ones which work abroad attract a premium rating," the analyst noted, adding the end of the Multi-Fiber Arrangement did not appear to have made waves.
"The end of quotas has probably had less impact than people thought," he explained as, to a degree, "price deflation has been driven by the lower dollar."
Inditex's notoriously media-shy chairman Amancio Ortega, considered the richest man in Spain, and director general Jose Maria Castellano, are now looking to see 6.7 percent of the 2005 turnover emanate from Asia, according to business daily Cinco Dias.
Last October, Inditex, which imports about 30 percent of its products from Asia, preferring to source most of its materials from home, controlled 2,163 stores, some 730 under the Zara name, rising from 1,818 in 2003.
Late last year, Goldman Sachs, while noting some concerns on "excessive space expansion," expressed the view that "Inditex is a fabulously well-merchandised company in our view," with a strong inbuilt competitive advantage coming from its key principles of vertical integration and customer focus. According to a recent Interbrand survey, Zara is one of Europe's eight most influential marques.
Next week, Inditex, which in October employed 44,324 people, will unveil its 2004 results, having posted 447 million euros (US$580 million) in net profits on consolidated 2003 turnover of 4.599 billion euros (US$6 billion). |
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Tell me what you eat, and I will tell you what you are.-- Brillat-Savarin |
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smurfette
PopStar
Joined: Nov 07, 2003
Posts: 1287
Location: smurf village
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Aug 11, 2005 - 02:59 PM |
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i think they are talking about the positioning of the brand in terms of marketing, it's not targeted at the high ending customers, more catering the younger generation--business casual style and etc. |
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statistically significant |
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izanami
PopStar
Joined: Jan 27, 2004
Posts: 1037
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Aug 11, 2005 - 03:00 PM |
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I think 'cheap' is relative. I can't afford designer wear, but I would rather pay more for good design than peanuts for rags that don't last and make you look sloppy. |
_________________
Tell me what you eat, and I will tell you what you are.-- Brillat-Savarin |
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wsl
SuperStar
Joined: June 23, 2005
Posts: 1595
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Aug 11, 2005 - 03:13 PM |
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these branded clothes in china, all above rmb 100, like 200, 300, and even up to 500, 600 or more RMB. and the quality isnt that good.
this is why you laowais are lucky. |
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Henry_Chinaski
Board Lord
Joined: Aug 16, 2003
Posts: 5025
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Aug 11, 2005 - 03:13 PM |
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Zara is a pretty interesting business that defies so many laws of traditional clothes stores.
Because of their capability of manufacturing very short runs they always have new stuff in their stores and they pratically have NO markdowns (just as a comparison, on average Gap marks down 40% of their inventory by 40%). The stores have almost no inventory and that is a big incentive for people to purchasing something they like, as they know for sure that the same item won't be there for long. Plus, Zara has a gazillion of people accross the world hitting bars and discos and submitting digital pics of what people are wearing straight to their designers in Spain. The lead time from pic taken up to new product hitting the stores is ridiculously short, which blows away the competition.
It's an amazing company, I hope they crush all the sloppy buggers out there living in the past.
Great business model. |
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kamprad
Talker
Joined: July 27, 2005
Posts: 81
Status: Offline
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Aug 11, 2005 - 04:25 PM |
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| wsl wrote: |
| you laowais are lucky, generally no branded clothes in china will sell at the price of 10, 20, or up to 50, 60 rmb, all under 100 rmb. |
some non-branded handmade cloth r very expensive!!! |
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kamprad
Talker
Joined: July 27, 2005
Posts: 81
Status: Offline
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| Posted:
Aug 11, 2005 - 04:31 PM |
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| Anniboodk wrote: |
| It's in the same price range as Mango. |
and Oasis as well  |
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lucar
Board Royalty
Joined: July 05, 2004
Posts: 6313
Status: Offline
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Aug 11, 2005 - 05:21 PM |
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Zara makes cheap clothes that are kind of nice and very fashionable. Men have to be careful though...you can end up looking too "Guido" if you aren't careful. Stay away from the shoes if you are a guy.
Zara shares the same warehouse with us in New Jersey. Their sales volume is incredible. They are able to maintain such low prices because they carry no inventory (in the USA at least). They use some sophisticated algorithm to figure production and just ship what they need. All of their shipments are just cross docked-a smart company. |
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Henry_Chinaski
Board Lord
Joined: Aug 16, 2003
Posts: 5025
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Aug 11, 2005 - 05:41 PM |
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Two articles on Zara.
Inditex
The future of fast fashion
Jun 16th 2005 | LA CORUÑA, SPAIN
From The Economist print edition
Landov
Landov
Spain's Inditex, the owner of the Zara chain of fashion stores, has bold but worrying expansion plans
WHEN Spain's Crown Prince Felipe and Letizia Ortiz Rocasolano announced their engagement in 2003, the bride-to-be wore a stylish white trouser suit—which raised some eyebrows among those concerned with royal protocol. But within a few weeks, hundreds of European women were wearing something similar. Welcome to the world of instant fashion, in which a Spanish company is defying conventional wisdom and building a global brand: Zara.
Instead of trying to create demand for new trends in the summer and winter seasons using the catwalks of fashion shows, Zara studies the demands of the customers in its stores and then tries to deliver an appropriate design at lightning speed. In the process, Zara has become the most profitable arm of Inditex, a holding company of eight retail brands, and one of the biggest success stories in Spanish business.
From its beginnings in 1963 when Amancio Ortega Gaona, its founder, began to trade garments, Inditex has emerged as one of the world's fastest-expanding makers of affordable fashion clothing. Since 2000 it has more than doubled its number of shops to 2,240 by the end of last year, with sales of more than €5 billion ($7 billion). On June 13th, Inditex announced net profits up by 21% for the first quarter.
How can Inditex thrive when Europe's entire textile industry is supposed to be under threat from cheap imports from China? At Inditex's heart is a vertical integration of design, just-in-time production, delivery and sales. Some 300 designers work at the firm's head office in La Coruña in Galicia, a poor region in northern Spain. They are in daily contact with store managers to discover bestselling items.
Fabric is cut in-house and then sent to a cluster of several hundred local co-operatives for sewing. When the finished product returns, it is ironed, carefully checked and wrapped in plastic for transport on conveyor belts to a group of giant warehouses. Twice a week lorries deliver the garments to other European countries and by aircraft to the rest of the world.
Production is deliberately carried out in small batches to avoid oversupply. While there is some replenishment of stock, most lines are replaced quickly with yet more new designs rather than with more of the same. This helps to create a scarcity value. Shoppers cannot be sure that something that has caught their eye will appear in the store again—or can be found at another Zara store, even in the same city. On the other hand, they also know that everyone they meet will not be wearing it.
The result is that Zara's production cycles are much faster than those of its nearest rival, Sweden's Hennes & Mauritz (H&M). An entirely new Zara garment takes about five weeks from design to delivery; a new version of an existing model can be in the shops within two weeks. In a typical year, Zara launches some 11,000 new items, compared with the 2,000-4,000 from companies like H&M or America's giant casual-fashion chain, Gap.
All of Zara's shops use point-of-sale terminals to report directly to La Coruña. On top of that, every evening store managers consult a personal digital assistant to check what new designs are available and to place their orders according to what they think will sell best to their customers. In this way, its store managers help shape designs. Zara does not employ star designers but often unknowns, many of whom are recruited directly from top design schools. Inditex is extremely clever in how it uses technology, says Andrew McAfee, a Harvard Business School specialist in the corporate use of information technology. The company keeps its technology simple—even a little old-fashioned—but as a result spends five to ten times less on information technology than its rivals.
Zara is also more parsimonious with advertising and discounts. It spends just 0.3% of sales on ads, compared with the 3-4% typically spent by rivals. “We try to avoid markdowns”—now an almost permanent feature of American department stores—says José María Castellano Ríos, Inditex's deputy chairman. On June 13th the board appointed Pablo Isla to succeed him as chief executive. Mr Isla, a former co-chairman of Altadis, a Franco-Spanish tobacco company, is not a fashion man. His appointment followed a long search by head-hunters for someone able to manage a company that will inevitably become more complex as it grows and its supply chain lengthens.
Mr Castellano says that over the next four years, Inditex plans to double in size to some 4,000 shops with sales of more than €10 billion. Most of this expansion will be in Europe, where he sees room for growth, especially in fashion-conscious Italy. Some investors are worried about this rapid pace. Over recent months the shares of H&M, a company with more modest plans for expansion, have performed better than those of Inditex.
So far, Inditex has only 16 shops in America, the world's biggest market, and aims to gets its European expansion going before pushing hard on the other side of the Atlantic. By February, H&M had 76 stores in America, so it could get well ahead of its Spanish rival in that market. But H&M does things differently, including the hiring of star designers. Stella McCartney has been appointed to design its autumn collection, which will be sold in some of its European and American stores.
Inditex's caution could be wise. Only two years ago it missed some of the year's main fashion trends. In their assessment of what went wrong in 2003, analysts at CSFB, an investment bank, identified issues of complexity and control as being among the causes—worrying for a company that likes to keep things simple. Even so, José Luis Nueno of IESE, a business school in Barcelona, believes the firm will grow successfully. Consumers have become more demanding and more arbitrary, so fast fashion is better suited to these changes, he argues. Inditex has proven that cheap and fast fashion can also be trendy and well presented. Zara's stores have won awards for their decoration and their shop windows.
To smooth its growth, Inditex has opened a new distribution centre in Zaragoza. It has also begun to obtain some of its basic garments from low-cost countries, although the bulk of its production remains in Europe. China, for instance, accounts for just 12.5% of its production, less than that of rivals. Yet the further Inditex moves away from home, the trickier it will be to cater to instant-fashion whims. When Madonna gave a series of concerts in Spain, teenage girls were able to sport at her last performance the outfit she wore for her first concert, thanks to Zara. Although Mr Castellano insists that Inditex can be as nimble in other countries as it is at home, that could prove difficult. And if it stumbles, as Mr Castellano must know, the fickle world of fashion will be merciless.
And:
Spain’s Zara
Floating on air
May 17th 2001
From The Economist print edition
A mixture of vertical integration and street smarts has transformed a small Spanish clothing chain into a global success
MOST fashion retailers discreetly tuck their price tags inside their garments. Not Zara. Its sales tickets are big and colourful, emblazoned with the flags of a dozen countries, each accompanied by a local-currency price that is the same for that item around the world, from Madrid to Riyadh to Tokyo.
In an industry traditionally geared to local tastes, this United Nations approach exemplifies the centralisation and integration that have turned Zara into the world’s fastest-growing retailer. Over the past five years, the number of its stores has risen from 180, mainly in Spain, to 450 in 30 countries. Revenues have grown by an average of 27% a year since 1998.
Founded in 1963 as a maker of ladies’ lingerie in the Galician town of La Coruna, Zara today is the centrepiece of Inditex, a holding company for five fashion chains that is planning an initial public offering on the Madrid bourse on May 23rd. The flotation is expected to value Inditex at as much as euro9.3 billion ($8.2 billion) and cement the standing of its reclusive 65-year-old chairman and majority shareholder, Amancio Ortega Gaona, as Spain’s richest man. Mr Ortega started the business with just 5,000 pesetas ($83).
At the heart of Zara’s success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. This gives the group more flexibility than its rivals have to respond to fickle fashion trends. Unlike other international clothing chains, such as Hennes & Mauritz (H&M) and Gap, Zara makes more than half of its clothes in-house, rather than relying on a network of disparate and often slow-moving suppliers. H&M, for instance, buys clothes from more than 900 firms. “Vertical integration has gone out of fashion in the consumer economy,” says Richard Hyman of Verdict, a retail consultancy in London. “Zara is a spectacular exception to the rule.”
Starting with basic fabric dyeing, almost all Zara’s clothes take shape in a design-and-manufacturing centre in La Coruna, with most of the sewing done by seamstresses from 400 local co-operatives. Designers talk daily to store managers, to discover which items are most in demand. Supported by real-time sales data, they then feed repeat orders and fresh designs into the manufacturing plant. This, in turn, ships the desired items directly to the stores twice a week, eliminating the need for warehouses and keeping inventories low (see chart).
The result is that Zara can make a new line from start to finish in three weeks, against an industry average of nine months. It produces 10,000 new designs each year; none stays in the stores for over a month. Jose Maria Castellano Rios, the firm’s chief executive, who rather prosaically compares the shelf life of a new frock to that of a tub of yoghurt, says constant refreshment of the store offering creates a sense of excitement that attracts new shoppers and ensures that old ones return.
Moreover, Zara’s business model makes it highly price-competitive, allowing it to offer mid-market chic at downmarket prices. And it protects against slip-ups, too. Whereas most retailers have committed 60% of their production at the start of a season, the figure at Zara is 15%, so it is easier to dump a range that turns out to be unpopular—and Mr Castellano admits that Zara, like everybody else, makes mistakes.
It tries to minimise them, however, by pushing its designers on to aeroplanes to search out new trends. Constant travel, catwalk shows and even music videos help to bring new ideas—a look seen on MTV can be in the stores within a month.
This is underlined by Zara’s expansion plans. At a bad time for many international retailers—Marks and Spencer is retrenching overseas, while both Gap and H&M have issued profit warnings—Inditex plans to open 150-200 new shops in each of the next three years and to plant its flag in Switzerland, Italy, the Czech Republic and more of Latin America and Asia. Most of the new stores—and the accompanying $1.1 billion of capital spending—will be for Zara, which contributes almost four-fifths of Inditex’s euro2.6 billion annual sales.
There is nothing wrong with taking advantage of rivals’ weakness to grab market share, but Zara’s (still entirely Spanish) management will have to be careful not to indulge in the over-expansion that floored so many of its rivals. The further the group gets from its heartland, where it has faced only modest competition, the more its model will be stretched, given its lack of local distribution. It is also unclear how successfully Inditex can apply the Zara approach to its smaller chains, some of which it acquired rather than built itself. But these are niggles. For the moment at least, there appears to be one United Nations that works.
The following graph shows where their success comes from:
Interesting how design, marketing, sales and supply chain and supply chain management are well knit in Zara. |
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mantis.killer
Reacher
Joined: June 27, 2005
Posts: 309
Status: Offline
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Aug 11, 2005 - 09:40 PM |
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Zara is a retialer not a branded company, like mango from spain.
Sells ladies mens and childrens garments at good prices and medium quality
Competes with H&M, Gap etc. on a worldwide scale. |
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a posse ad esse |
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kika
Seeker
Joined: Feb 14, 2005
Posts: 58
Status: Offline
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Sep 03, 2005 - 01:03 PM |
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