In this success story, we are going to share Amancio Ortega Gaona biography, a Spanish fashion entrepreneur and the co-founder of Industria de Diseño Textil, S.A. (Inditex), which includes prêt-à-porter fashion chains such as Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, and Uterqüe. Born into poverty, Ortega Gaona has accumulated enormous wealth, modesty, and openness remaining his main personality traits. Known for having been publicists’ mystery for decades, Amancio Ortega is a true media nightmare, as neither the Spain’s richest man nor any of his relatives have ever given public interviews.
Amancio Ortega Gaona was born on March 28, 1936 (the beginning of the Civil War in Spain) in Busdongo de Arbas, a small village with less than 100 citizens located in the northern Spanish region León. He was the youngest of four other children. Being extremely poor, the Ortega family soon moved to La Coruña, Galicia, Spain, surviving due to Amancio father’s job at the local railway station. They lived in a beggarly house at the railway workers’ quarters. His mother employed as a housemaid, Amancio heard her pleading for credit at local stores, unable to afford essential items, which made him leave school and start working at the age of 14. Amancio Ortega’s first job was a shop assistant at a local company, called Gala, where he learned to make clothes by hands. Frozen in time, Gala, a conventional shirts maker, is still active and open on one of La Coruña’s downtown corners. Selling traditional shirts, caps and cardigans, José Martínez, who inherited the Gala business from his father, has recently reported that the visitors never buy, they simply ask about his youth friend, Amancio.The customer has always driven the business model... – Amancio Ortega Gaona Click To Tweet
Working hard at his teens, Amancio Ortega enjoyed riding his bicycle around the town, whenever he had free time. His brilliant business idea could have come during one of such rides and Ortega realized that to earn good money, one should give customers what they want. At the age of 16, Amancio Ortega was pondering on how to figure out potential client desires and, what is even more important, meet that demand. In the 1950s, an an autonomous community of Spain, Galicia, was a perfect spot for his business plan: poor job alternatives in combination with numerous single women who could sew pretty good. Ortega started to organize women into sewing cooperatives. The product line included: lingerie, babywear, and nightgowns. Ex-employees of the sewing cooperatives ran by Ortega shared with media how thrilled the Galicia ladies were to get that job with great conditions, and how excited they were to see their boss being very close to the workers.
In 1963, having gained ten years of managing sewing cooperatives experience, Amancio Ortega Gaona founded his first company, Confecciones GOA, S.A. (his initials if to read backward). The founder of the bathing robes business organized Confecciones GOA into a family company. Amancio was responsible for developing new fashion trends, Antonio (his brother) was heading the commercial issues, Josefa (his sister) was responsible for bookkeeping, and Rosalía Mera Goyenechea (January 28, 1944 – August 15, 2013) was performing as his business partner. In 1966, Amancio Ortega married Rosalía Mera.
Known to Be An Incognito
The private life of Amancio Ortega is terra incognita. Known to be publicity discreet, Amancio Ortega spends millions of dollars to protect the privacy of his life. That is the reason of no one being aware of Ortega’s first marriage date. However, known to be his first business partner, it was Rosalía Mera, who became Ortega’s first wife. The married couple never appeared together in public; nor did they let their two children, Sandra Ortega Mera and Marcos Ortega Mera, be pictured by intrusive paparazzi. Their clothing business was the only affair they were busy with. Together with Rosalía Mera, Amancio Ortega integrated Confecciones GOA into Inditex, the holding group of a number of popular brands. Founded in 1985 and floated onto the stock exchange in 2001, the Inditex group, a Spanish clothing seller, owns Zara, Pull&Bear, Massimo Dutti, Stradivarius, Oysho, and Bershka brands.
However, in 1986, Amancio Ortega divorced Rosalía Mera. In 2001, he married Flora Pérez Marcote having a love affair with her since 1983. She is 18 years younger than Amancio. Used to be one of the workers of Ortega’s company, currently, she holds a board position at Inditex. Being in her early 30s, Marta, Ortega’s daughter from Flora Pérez, is considered to be his future successor. Marta is very close to her father; similar to Ortega’s experience, she has undergone her professional training at Inditex, starting from the lowest level of a store employee. Along with the career similarities, Amancio Ortega and Marta share horse riding a hobby, the loving father purchased an equestrian center in Galicia, Spain.
It is a known fact that the overall amount of pictures with Amancio Ortega, who has been avoiding the limelight during his whole life, cannot amount even 200 ones. Zara official news corporation has presented most of them, and the other photographs of Amancio Ortega Gaona, as well as cheeseparing pieces of information, have been developed either by Covadonga O’Shea or by Xabier R. Blanco. The latest being a local Spanish journalist who has been tracking Amancio Ortega’s career; O’Shea is Ortega’s lifelong friend, she runs a fashion school at the University of Navarra. Xabier R. Blanco and Jesús Salgado co-authored non-official biography of Amancio Ortega Gaona, called Amancio Ortega, de cero a Zara, published on February 17, 2004. However, Covadonga O’Shea has been granted the right to develop Ortega’s official biography. On October 21, 2008, the book was published in the Spanish language under the title Así es Amancio Ortega, el hombre que creó Zara. In March 2012, the book was published in the English language under the title The Man from Zara: The Story of the Genius Behind the Inditex Group.
Unique Business Model of Zara
Ventured into clothing retail since early juvenility, Amancio Ortega Gaona launched his own company, Confecciones GOA, in 1963. Having formed successful sewing cooperatives with the low-cost local workforce, Ortega was offering fast production clothing turnarounds. Several factories being acquired in Spain, Amancio Ortega opened his first storefront in La Coruña downtown, called Zorba, in 1975. Named after Ortega and his first wife’s favorite movie, the store soon changed the name Zorba into Zara. The reason of that was a complaint of the owner of a bar located nearby and called Zorba. The bar Zorba remained local, but Zara stores expanded to several Spanish cities by the early 1980s. In 1988, after the Inditex Group was formed, Ortega opened first Zara shop in Portugal, where he found the working force to be even cheaper than in Spain. In 1989, Zara shop was opened in the USA, and it was introduced in London in 1998. Zara’s further international expansion came along with Inditex’ retail portfolio development: Pull&Bear and Massimo Dutti (1991), Stradivarius (1994), Bershka (1998), Oysho (2000), Uterqüe (2008). By 2000, the Inditex’ brands were distributing in over 30 international markets.
Amancio Ortega’s business success is tightly connected with a unique business model of the fast fashion retailer. The two key ideas of this business model are to give customers what they want as quickly as possible. For instance, Zara is known for its 12,000 new designs developed and distributed annually, speed being the retailer’s driving force. Moreover, Zara refreshes its garment stocks twice a week. Amancio Ortega Gaona imposed a golden rule back in the 1970s, which states to receive new orders within 48-hours’ time period. That is why, Zara factories look like a well-oiled machine, where hundreds of designers and sales analysts co-operate in an open space floor, organized around these two principles, namely the delivery speed and a customer-orientated approach. Designers usually create three models a day, and analysts together with patternmakers choose one item from each set. Commercial experts usually possess regional expertise, being from varied backgrounds. These experts apply reports from local managers to compile appropriate to customer habits collections. Each employee of Zara is trained to keep an eye on clients’ styles, requests, and selling trends.
These two basic rules to give customers what they want, and deliver the orders with the motorway speed, have assisted Amancio Ortega in building the fashion empire. The Inditex corporation has become a global fast fashion retailer with its 137,054 professionals employed in 6,683 stores and facilities, which are currently located in 88 countries, the annual sales revenue being over €18.1 ($19.67) billion as of January 31, 2015. The fast fashion empire would have been impossible to build unless Ortega has ripped up traditional haute couture business model to replace it with his own unique one, refined over decades. However, those brutal schedules, the fashion industry has never attempted to keep to, are not always flawless. There arise failures from time to time, being removed from stores as soon as detected. Such incident happened on Manhattan Avenue, where Zara white jackets were not loyally met by the clientele. As soon as sales staff discovered that the latest preferred cream color, the white ones were withdrawn, and the model reissued in cream tones, which in turn was a success.We cannot limit ourselves to continuing on the path we have already opened… – Amancio Ortega… Click To Tweet
To save their customers from identically dressed fashion twins, Zara never reproduces its hits. The brand simply modifies and offers varied versions. Loyal Inditex’ customers also know the best days to purchase items from new collections. For Zara, the day of new clothing deliveries are Sundays and Thursdays, whereas shoes come on Tuesdays and Fridays. At Stradivarius and Massimo Dutti, new garments arrive on Tuesdays and Thursdays. Every Tuesday and Friday works for Bershka and Pull&Bear. Seduced by the state-of-the-art collections, which are meticulously cut and tailored in countries with strong traditions of sewing, famous Zara clients include Queen Letizia of Spain, the Duchess of Cambridge, Michelle Obama, Mary Berry, Olivia Palermo, Alexa Chung, Katie Holmes, Samanta Cameron, January Jones, etc. A famous fashion blogger, Garance Dore, has coined another term – “Zaragasm”, which means being seduced by the variety of choice and fashionable message of Zara offers.
Due to the business model described and a Zaragasm influence, very few companies are able to compete with Inditex. Its high street competitors are known only for fashion, as opposed to Zara, which is also associated with its distinct style, a feature attracting privileged 45+ demographic with its vast disposable income. A retail analyst at Barclay’s, Christodoulos Chaviaras, believes the company is challenging itself to operate faster. A new Zara store, for example, opens on a daily basis somewhere in the world; and the 6,000th store of Inditex’ was launched on Oxford Street, London, a few years ago. There are approximately 50 Zara storefronts in the US, 2,000 in Spain, and about 350 in China. Most manufacturing factories located still in Spain and its neighboring countries, the Inditex Group has its production in China and Morocco as well, which makes it possible to increase the production overnight.
Investments and Philanthropy
Amancio Ortega’s business portfolio, which has made his net worth, includes not only fashion, but also some additional investments, such as gas, banks, tourism, and worldwide real estate holdings. Inditex shares’ price increasing constantly, Ortega Gaona owns the holding’s 59.3 per cent, currently valued at €110 ($119.54 ) billion. Financial magazines report the fashion business allowed Ortega to become the owner of real estate holdings in London, Paris, Madrid, and Lisbon, as well as Miami luxury accommodations. Apart from the business activities, Amancio Ortega invests in charity. Together with his first wife, Rosalía Mera, Ortega founded The Paideia Foundation in 1986. This philanthropic foundation assists people with mental and physical disabilities to get an interdisciplinary education and training. Amancio Ortega’s ex-wife, Rosalía Mera Goyenechea, used to perform on the position of the president of the foundation. The Paideia Foundation received many awards since the beginning of that charitable project, Amancio Ortega introduced another non-profit organization in 2001. Called Fundacion Amancio Ortega, it is a private NGO aiming to promote science, research, education, social action, culture, and welfare. Recognized with the Order of Civil Merit in 2009, Mr. Ortega is the president of the organization, and Flora Pérez Marcote, his younger daughter, serves as the vice president.
The unique business model of Zara business, with its two golden rules of giving customers what they want as quickly as possible, is not the only one business secret of Amancio Ortega. Being a prime properties owner, Amancio Ortega rents them to his Zara stores and correspondingly performs as his fashion business’ landlord. It is not a coincidence that Inditex’ stores enjoy a loyal land proprietor, who never increases the rental cost. In 2011, bidding with Tishman Speyer, the owner of London’s Tower Place, Rockefeller Center, and the Chrysler Building, for the 43-floor Picasso Tower, Madrid’s famous office building, Amancio Ortega won. His $556-million offer was accepted, and Amancio Ortega Gaona paid all-cash.
Moreover, in 2014, Ortega purchased another $60-million stake (the first one cost $105 million) in Barcelona’s prime real estate, which hosted Apple flagship store. Continuing to purchase real estate locations in London’s West End, Meatpacking District of NYC, Barcelona’s best shopping areas, and Beverly Hills’ Rodeo Drive, Amancio Ortega invested $1 billion within four months (December 2013 to March 2014). Currently, Amancio Ortega maintains both: the fast fashion retail business, and his real estate investments, – being compared to Sam Walton, the Wall-Mart founder, and Donald Bren, the Irvine Company owner, the most powerful one in the real estate sector. The precise value of Ortega’s real estate empire is estimated at $10 billion. The entrepreneur spent somewhere around $6 billion over the past decades to purchase real estate in Chicago, Miami, San Francisco, Washington, Berlin, and Paris. Such acquisitions are usually made through Pontegadea Inmobiliaria and Pontegadea Inversiones, Ortega’s real estate holdings.Die of success? Give me a break! We’ve only just started! – Amancio Ortega Gaona Click To Tweet
The unemployment in Spain being at a critical level even in 2015, the trough of the crisis fell in the year 2007, when all Spanish corporations downtown’s offices in Barcelona, Madrid, and Bilbao, sold their properties and moved out. Inditex has not heard about the crisis, Amancio Ortega taking the advantage of the Spanish economic default to acquire locations for deep discounts. The president of Spanish Association of Fashion Designers, Modesto Lomba, believes Inditex lives in another dimension. Pablo Isla, the CEO of Inditex, annually announces the stable growth of the holding’s revenue.
In 30 years since Inditex was founded, Amancio Ortega has become fast fashion mogul. According to Forbes, Amancio Ortega’s total net worth is estimated at $73.5 billion as of December 20, 2015. He is so successful due to his distinctive personality traits, which include mind flexibility, workaholism, and profound self-confidence.
Amancio Ortega’s flexibility of mind has been proven by his pioneering fast fashion clothing business. Ortega’s progressive ideas made it possible to respond to consumer demand quickly, developing ready-to-wear fashion clothing (instead of designing haute couture collections). According to the legend, Amancio Ortega’s habit is to behold young people lifestyles to reproduce relevant, innovative design at Zara.
They say Ortega might see a motor biker at traffic lights who was wearing a hand-made jeans jacket decorated with occasional patches, and the next moment Amancio would call one of his designers to describe the garment he has recently spotted to have it in the next Zara collection.
In 2012, Ortega asked the vice president of Inditex, Pablo Isla, to take his place of the Inditex’s CEO. However, at the age of 79-years-old Amancio Ortega travels daily to the headquarters, 10 miles away from his home place, showing no sign of being less interested in the further international expansion of his brands. Despite his wealth, Ortega has never had his personal office, as he enjoys working together with other designers in the open-plan space developing new trends and discussing new colors and fabrics.
He remains open to all employees, as there are no memos and lack of computers in this hierarchically flat company and Inditex’ employees do not have to fix appointments with Ortega long beforehand. Moreover, Loreto García Falque, Head of Zara Studio at Inditex, reports that they never attend fashion shows, but listen to customers spotting new tastes. Amancio Ortega is still performing as the main muse and inspiration for the whole corporation.
Amancio Ortega Gaona likes to work and rarely takes vacations. The textile empire owner lives quite a modest life residing in his native La Coruña, the Galician town with approximately 300,000 citizens located on the North Atlantic’s windswept coast. Amancio Ortega visits the same coffee shop every day, downtown La Coruña, ordering eggs and fries for breakfast. Fellow citizens often see Ortega walking along Plaza Maria Pita. The mogul behind Zara eats lunch in the company cafeteria, sharing tables with some of the fabric experts and buyers to discuss business matters. He never visits resorts for millionaires, Greece being his rare vacations choice. His flying fear also motivates Ortega to devote a few weeks a year to hiking pilgrimage tours along Galicia. While at home, declining extravagant hobbies, Amancio Ortega is fond of rearing chickens and goats, as well as meeting his grandchildren at his Spanish villa.
Unprivileged childhood conditions and no MBA degree obtained have apparently made Amancio the man he is: possessing an entrepreneurial spirit, deeply involved with all the business routine, while keeping a low profile. Despite his fashion business, Amancio Ortega has no interest in wearing brands himself, being seemingly the only person who does not wear Inditex’s garments. His outfits’ preferences are as modest as his lifestyle: no tie, a simple white shirt, a blue uniform blazer, and gray trousers, – none of those branded.
Amancio Ortega Gaona life story shows that he achieved his success thanks to his self-confidence, hard work and, of course, thanks to giving to his customers what they want. We hope you have enjoyed exploring Amancio Ortega Gaona biography and success story of the Inditex Group, and it has inspired you to new discoveries.