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Hello and welcome to Business Daily from the BBC World Service. I'm Emma Simpson. Today I'm in northern Spain for a special programme from the headquarters of clothing retailer Zara. It has more than 1,700 stores globally selling clothes, shoes and jewellery to its fashion-conscious consumers.
We've been granted rare access to the teams creating the garments, following the design process right through to the shop floor. I'll also be speaking to the CEO of Zara's parent company Inditex, Oscar García Maceras. We are continuously listening to our customers, receiving a lot of data coming from what's performing well, what's not performing so well. That's all coming up on today's Business Daily.
Zara is one of the most recognisable brands in the world. I'm standing in a big building right at the heart of the business for a rare glimpse behind the scenes at Zara HQ. It feels more like some big technology campus than a retailer with its sleek windows and gleaming white corridors. I'm also glad I've got my trainers on as this site is vast.
There are 350 designers here. Mehdi's job is part of a team producing the key pieces of the season, the clothes that kickstart the collection, which is always changing based on what shoppers want.
Where does the mood come from? Where is the inspiration? I think there are no rules about that. It's very free. In Zara it's true that we have also, with the different lines, I'm talking about studio maybe, personally because we are working in this department. So for the campaign collection, we are doing a summer and winter campaign each year.
And the story is totally different one season from the other. So it depends on the story we would like to translate, to transmit, and the feeling we have. So we are on the street, we are traveling, we are maybe also with a movie we can see at the cinema, a photo exhibition. If one photographer is more in trend, so we'll have...
to look on the books and we go to the exhibition and we have like few elements. So it depends, there is no rules in general so it's totally different. So what happens next then? So you've got your mood board. You have the mood board so now after the mood board we have an idea about the woman we would like to define and we start drawing different volumes, different shapes. So of course when we create a collection
it's important to have each kind of garment, so a dress family, trousers, blouse, to have a complete collection corresponding to the wardrobe of many women, not one kind of woman.
And so we start doing sketches. It's becoming more concrete because now we can see exactly what kind of shape, what kind of volume we like to work on. And then we go to the department pattern makers and then we start to make it in shape.
Material has also to be sourced and costed. Jennifer Stoppa is one of the fabric specialists. She's Italian and used to work for a luxury fashion house before Zara, and her job is figuring out the right material for the product. Every day I work with the designer to find the best recipe to have the perfect garment. And where do you get your fabrics from? All around the world.
As we work in studio, we mainly try to work in Italy to have this kind of unique of the quality of the fabric. But of course, we look as well in China as well as Turkey. But as we try to be more like the images of Zara and we try to propose unique garment, we mainly buy the fabric in Italy. What's the hardest thing you've had to do?
I don't know, I think every day. Every campaign, because as Mediasplain, every six months we work in a different campaign and we have every six months a new challenge. Sometimes it's more about, I don't know, looking for the perfect leather, another time it's looking for the perfect check or the perfect wool. So I think every six months is a new challenge.
And what's it like working here? It's very active, you know. We are constantly moving, we are constantly finding solutions, we are constantly making garments. We never stop. And also have the possibility to prove ourselves because sometimes, you know, we play solo but we also play in a team so it's very, like, I don't know, it's challenging. So it's good. I mean, I think if you like to work in a place when it's fast, it's
I think it's a great place to work. It can also be a nerve-wracking moment when their clothes finally hit the shops, even though the studio collection is made in smaller batches. Of course, the basic garments are more in a huge quantity and the studio collection, for example, is more in a limited edition. But the stress is the same. All the designers are all the same and the day before the launching of the collection,
We have the ranking, we have the ranking, what's the best seller, what we sell, we don't sell, so this is a very normal stress. What's hot for the summer then?
For the summer, so it will be a very sexy summer, I would like to say. We are like, the short length is coming back a lot. And it's like very into the freedom collection, like a very light fabric, transparent, fringes, a touch of romanticism. It's a bit like a cowboy romantic with a touch of rock and roll. Right?
A sexy summer with a touch of rock and roll. OK, I've got that in my head. This is the woman of summer 2025. I've now come to another part of the building. This is where they cut the patterns for women's clothing. So by now we've got the design, the fabric, and here they make the patterns.
patterns. So we're seeing paper being cut and pinned onto mannequins following precise instructions and then if everything's okay it goes to a team of people on the same floor who are running up the actual sample. Dozens of women are beavering away on sewing machines producing the first real sample of fabric.
Mar Morcote is a pattern maker and has been here 42 years. Technology has progressed a lot, but each garment is examined with a magnifying glass and it's well finished. We check that the prototype is OK for production with all kinds of details such as buttons, zippers. We make sure everything is correct.
What does it feel like to see the clothes you have made worn by women on the street?
When you finish the item and see that it looks good and it goes into production and then sometimes it sells out, it's marvellous. Zara is owned by Inditex, the world's biggest fashion retailer. It runs a host of brands from Pullen Bear and Stradivarius to Bershka and Massimo Dutti, all targeted to slightly different demographics. Zara, though, is by far the biggest and most important brand.
Inditex's commercial head office is also here. Oscar, nice to meet you, nice to see you again. Have a seat. Oscar García Máceras is its CEO. He was born in 1975, the same year Zara opened its first shop. Reaching the 50th anniversary of the company is an important milestone and for us these 50 years
It has been a long period of innovation. What is Zara's secret sauce? At the end of the day, it's the right execution of the model and besides that, probably the DNA of the company, the culture of the company in terms of non-conformism. So what is Zara's business model that other high street retailers find hard to beat?
In the old days, retailers did two collections a year, typically outsourcing production to lower-cost factories in the Far East, ordering months in advance. Zara went against conventional wisdom by making a lot of its products much closer to home, including here at HQ. It's been a big part of its success.
As well as this factory on site, Zara owns and operates another seven nearby, producing small volumes of garments. They also work with factories in neighbouring Portugal as well as Morocco and Turkey. They all add up to just over half of Zara's production, allowing it to react more quickly to the latest trends.
Garments can be turned around in a matter of weeks. More basic fashion staples like white T-shirts are produced with longer lead times in countries like Vietnam and Bangladesh. You deal with something like 1,800 suppliers in many countries, but yet you bring the products back to Spain to then distribute to the shops. Why bother doing it like that?
For us it's critical accuracy. So that it's something that allows us to make the right decision in the last possible minute in order to assess properly the appetite from our customers in order to adapt our fashion proposition to the profile of our customers in the different locations
at the store level in order to select the number of units, the sizes, the colors that should be sent to the different stores. A tightly controlled distribution system. Data is also key.
I can see quite a few big screens dotted around the commercial teams showing in real time sales around the world and how they compare with last year. And it's so granular, they can also see individual products and how they're performing. It's all part of the continual feedback loop between employees and stores and the workers here at HQ.
So we are continuously listening to our customers, receiving a lot of data coming from what's performing well, what's not performing so well. So we are trying to send data
twice per week newness to all of our stores from our logistics centres, bearing in mind what our customers are looking for. So making these decisions twice per week in order to send our fashion to the different stores. The fashion industry has a massive
environmental impact and your business along with everyone else is predicated on selling more stuff. Is that sustainable in the longer term? Sustainability is one of the four key pillars of our business model bear in mind that we were a
25 years ago the first Spanish company, a signatory of the global compact of the United Nations. So we have been working for 25 years adapting our decision-making process, adapting our way of executing the model in order to be absolutely aware of
the different impacts of the designs, the materials, the processes that we have to use. So it's a challenging question for the industry, but we have been working in order to transform ourselves and in order to foster the transformation of the fashion industry. But of course part of your model
is to get us to buy on impulse because, of course, your clothes don't stay in stock for long. That's part of the whole offer, the fear of missing out. And it's getting us to maybe buy more than we need.
Well, accuracy again is critical in the model. So we are trying to spot the trends, to provide customers what they are looking for. This is something that allows us that at the end of any year, of any campaign, the percentage of leftovers is truly low in comparison with another companies. So
Being absolutely accurate, spotting trends, executing those trends through the model, sending to any location what our customers are precisely looking for, we consider that this is the right approach in order to have the right impact.
But is Zara starting to lose its shine after posting slower sales growth at the start of this year? Mainstream rivals like H&M, Mango and Uniqlo are trying to catch up. And now there are new names disrupting the market. The fast-growing, ultra-cheap online players, Shien and Timu, which ship their goods from China. Does that trouble you?
Well, after five decades in the market, we have learned many lessons. Our fashion proposition does not rely on the price. Of course, we are looking for providing our customers
our products at affordable price, but for us it's critical to provide customers fashion that should be inspirational, aspirational, with quality, with creativity, with design and sustainable. So that's our approach in this sector that is at the same time absolutely highly fragmented, so we remain focused on the execution of our own model and our own proposition.
Despite the rise of online shopping, Zara's stores are as important as they've ever been. But it's been moving towards fewer but better ones, like its flagship outlet, just a few minutes from HQ.
It's after seven o'clock and the store is really busy. And I'm not being funny, but everyone seems really well-dressed. And I suppose it's not surprising, really, given that everyone either works at Zara or knows someone who does. It's clear the business has had a huge impact on the town of Akarunya.
Zara has come a long way since it was founded by Armanthio Ortega. From humble beginnings, he became one of the world's richest men and famously reclusive. Inditex is still majority owned by the family and his daughter Morta is now chair of the group. Mr Mathias says Armanthio, now aged 89, still pops in.
Well, he's a presence, physical or moral presence, absolutely every day. Zara revolutionised the way we shop, but it's now got to navigate a fast-changing landscape in fashion and in the world economy. The business says it's confident it can cope with the ripple effects from President Trump's tariffs. Where is your future growth going to come from? Because you surely can't continue to grow without
at the rate that you have been? Well, we have been seeing opportunities for growth in every single market for all of our brands both online and through our physical stores.
and this is connected with the high level of fragmentation of the sector. This is a sector in which market shares are not so critical. So we have been seeing different opportunities, but obviously this should be the consequence of spotting trends and executing properly the model. You're even opening a store in Iraq this year, is that right?
Yes, we are about to open our country number 98 with the opening of our first stores in Iraq and we have online platforms operating in 214 different markets.
New markets, but even in the most mature markets of the company, what we have been seeing is good opportunities to keep on growing. Oscar García Máceras, CEO of Zara's parent company Inditex. And that's it for today's Business Daily, presented by me, Emma Simpson. Thanks for listening. This programme was produced by Danielle Codd. If you'd like to hear more episodes, just search for Business Daily wherever you get your BBC podcasts.