You may be forgiven for not knowing much about billionaire Amancio Ortega, one of the most successful retailers in the world of fashion, but you must have certainly heard of his popular apparel retailer group, Zara. Ortega, who is in his late seventies, lives outside the public glare while Zara has presence all over the world. The retail group has more than 2,000 stores in over 80 countries.
As of January 2016, Amancio Ortega has a net worth of $67.1 Billion and is ranked as the 4th wealthest person in the world, according to Forbes. He has been an enigma for the world and the media, named several times as Spain’s richest person and one of the world’s top ten, and has even offered public shares of his company, Inditex. The Spanish firm he founded, called Industria de Diseno Textil (Inditex), is the parent organization that operates stores including Zara. The latter was co-founded with his then wife, Rosalia Mera.
So, who is Amancio Ortega?
Amancio Ortega was born in 1936 and is the son of a maid and a railroad worker. He had no formal higher education and started his career as a delivery lad for a shirt maker. He also worked as a tailor and draper’s assistant. As he gathered vital experiences, he realized the value of delivering products to customers without the help of distributors. The same strategy came to be used at Zara at a later date. It was in the beginning of the 1960s that he became a local clothing store’s manager. He quickly grasped that only a wealthy few could manage to buy expensive clothing. He decided to start production of similar products, but at reduced prices. He bought inexpensive cloth in Barcelona and began to cut out pieces with his hand. These were then sold to the local shops for a profit. The profits were used to establish his first every factory at the age of 27, in 1963.
That first store.
Later in 1972, Ortega explored the socio-economic conditions of the time. While the men set out to the sea, the women stayed back, looking after their home. However, these women were extremely good seamstresses, and Ortega got them together to produce robes for his company. The first Zara store in La Coruna, a port city where he lived, came up three years later, in 1975. The shop was just across the street from the city’s well-known department store. Later on, Ortega would become popular for choosing locations in strategic places. The company then grew exponentially, and in 1989, Ortega already had almost a 100 stores across Spain. The company’s annual report for the year 1999 said that Zara would democratize the world of fashion. Ortega’s belief was to offer fashion that was accessible.
Zara’s success story has been so remarkable that the company almost never needed advertising. Instead of pumping funds into advertising, the same are reinvested into opening newer stores. Zara is the flagship chain of the firm Inditex, which has as many as 100 other stores, all related to textile designing, retail, distribution, and production. The brands that are under the Inditex umbrella are Oysho, Mossimo Dutti, Stradivarius, Bershka, and Zara Home. The parent company runs 6,000 stores across the world.
What apart from fashion?
It is not just in the world of fashion that Ortega has made big moves. He has quite a formidable collection of real estate wealth, as well. For instance, take Spain’s biggest skyscraper, the Torre Picasso in Madrid, or Miam’s Epic Residences & Hotel. He has real estate interests in Paris, Madrid, Lisbon, and London. Apart from investments in real estate, he also has numerous of investments in tourism, banks, and gas. Ortega stepped down as chairman of Inditex in 2011, but owns almost 60 per cent of its shares.
Ortega shuns the spotlight and lives in a beachside house in Coruna with his second wife, Flora Perez Marcote, who was an Inditex employee. His daughter, Marta, from his second wife, is considered his successor. He has two children from his first marriage. A profile of Ortega in Bloomberg.com says that he took his first ever vacation only after Inditex’s IPO in 2001. He drives an Audi A8, if some news reports are to be believed, and dresses in a modest manner. He is also reported to eat lunch in the Zara cafeteria along with employees. Though the everyday operations at Inditex have been handed over to Pablo Isla, Ortega still takes an active interest in the business. A famous story that does the rounds about him speaks of his shy nature. It is sad that when Spanish Price Felipe visited the Inditex headquarters, the Prince was not received by Ortega, but one of his representatives. That’s how reclusive he is known to be! On the day of the IPO, Ortega hardly celebrated, according to newspaper reports from 2001. He actually reported to work, watched the TV news, and had lunch at the cafeteria!
Hurdles along the way.
Ortega’s has been an incredible rags-to-riches story, and he has overcome many a hurdle. French maker of footwear Christian Louboutin Sarl sued Ortega’s firm for infringing on its red-sole high heels, but it was unsuccessful. A Zara shoe costs lesser than $100, while the French one can go up to $1,000 or more. Ortega’s motto of making fashion accessible to everyone has often led to borrowing from big brands. The styles keep changing, leading to the famous fast-fashion motto of Zara. The brand churns out as many as 20,000 fresh items annually.
Inditex’s profits have been rising every year without fail since its 2001 IPO, and the company opened as many as 500 stores in 2014. From gathering seamstresses to make clothes to forming a booming conglomerate and staying among the top five richest men in the world, Ortega’s life has been a classic example of dreaming big while keeping one’s feet firmly on the ground. What he has done is plain old hard work and common sense. He has used his circumstances as a prop for his spectacular rise.