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  • Fast Fashion: Jim Fisher Strategy - RSM 5001 Emba 31

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    Hardeep Saund
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    Zara is a fast fashion retailer known for its quick response capabilities. It has several advantages over competitors like H&M and The Gap, including lower working capital at 25% of sales compared to 10% for competitors, lower markdowns at 2.5% versus 10%, and no advertising expenses unlike competitors that spend 3% on advertising. Zara is able to achieve quick response through a system of frequent small batch production close to stores, local and European sourcing, direct-to-store small shipments, and a young fashion-focused design team that makes quick in-season decisions. By 2009, Zara had grown its unique quick response system to include 4530 stores globally, demonstrating its operational success.

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    Zara is a fast fashion retailer known for its quick response capabilities. It has several advantages over competitors like H&M and The Gap, including lower working capital at 25% of sales compared to 10% for competitors, lower markdowns at 2.5% versus 10%, and no advertising expenses unlike competitors that spend 3% on advertising. Zara is able to achieve quick response through a system of frequent small batch production close to stores, local and European sourcing, direct-to-store small shipments, and a young fashion-focused design team that makes quick in-season decisions. By 2009, Zara had grown its unique quick response system to include 4530 stores globally, demonstrating its operational success.

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    176 views6 pages

    Fast Fashion: Jim Fisher Strategy - RSM 5001 Emba 31

    Uploaded by

    Hardeep Saund
    Zara is a fast fashion retailer known for its quick response capabilities. It has several advantages over competitors like H&M and The Gap, including lower working capital at 25% of sales compared to 10% for competitors, lower markdowns at 2.5% versus 10%, and no advertising expenses unlike competitors that spend 3% on advertising. Zara is able to achieve quick response through a system of frequent small batch production close to stores, local and European sourcing, direct-to-store small shipments, and a young fashion-focused design team that makes quick in-season decisions. By 2009, Zara had grown its unique quick response system to include 4530 stores globally, demonstrating its operational success.

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    Attribution Non-Commercial (BY-NC)
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    Download as pptx, pdf, or txt
    of 6

    ZARA Fast Fashion

    Jim Fisher
    Strategy - RSM 5001
    EMBA 31
    Four Retail Strategies
    ZARA (Inditex) H&M The Gap Benetton

    Revenue (Millions) 3250 4269 15559 2098

    Working Capital 0 1036 1.116 602


    - turns 4x 15x 3.3x

    PPE 1.228 661 4695 720


    - turns 2.6x 7x 3.3x 3x

    Assets 2505 2183 8566 2821


    -turns 1.25x 2x 1.8x 0.75x

    Net Income 340 410 - 148

    ROA 13.1% 18.8% - 5.2%

    ROE 22.9% 24.8% - 11.9%

    2
    ZARA (Inditex) Advantages

    ZARA Good Competitor

    Working capital - 25% of sales

    Markdowns 2.5% 10%

    Advertising - 3%
    Large young team Close to
    stores

    Fashion conscious Quick test


    Quick
    followers In season Dependent
    decisions on external
    Design suppliers
    Great Small batch
    locations production

    Limited
    advertising QUICK RESPONSE

    retail Sourcing &


    LIMITED manufacturing
    MARKDOWNS
    Frequent
    Limited shopping In season
    Stock Distribution response
    (scarcity)

    Local & European


    Direct to store suppliers
    Close to Highly
    manufacturing automated
    Small
    shipments

    ZARA (Inditex) Activity System (partial) 4


    ZARA (Inditex) Activity System

    V ALUABLE
    Asset productivity invested in stores

    Low inventory cost

    R are Unique system

    I nimitable Lots of parts to replicate

    O perable
    By 2009 had grown to 4530 stores
    from 1284 in 2002

    5
    ZARA (Inditex) stock chart

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