AMANCIO ORTEGA GAONA BIOGRAPHY: SUCCESS STORY OF ZARA FOUNDER

In this success story, we are going to share Amancio Ortega Gaona biography, the founder of the

Inditex Group, which includes prêt-à-porter fashion chains Zara, Massimo Dutti, Bershka, Pull &

Bear, and Stradivarius. The extraordinary

financial results of the clothing chains

mentioned led to Forbes ranking Amancio

Ortega to be the richest person in the world as

to October 2015, ahead of Bill Gates, the total

net worth of American billionaire being USD

$78.6 billion. 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.

Early Life

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, Amancio

Ortega Gaona was the youngest of four other children. Being extremely poor, the Ortega family

soon moved to La Coruña 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.

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

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, Spanish Galicia region 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.

Amancio Ortega Gaona founded his first company in 1963,

having gained ten years of managing sewing cooperatives

experience. He called it ‘Confecciones GOA,' his initials if

to read backward. The founder of the bathing robes

business organized GOA into a family company, Amancio

running the fashion, Antonio (his brother) heading the

commercial issues, Josefa (his sister) bookkeeping the

business matters, and Rosalia Mera (whom he would later

marry) performing as his business partner.

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 Rosalia Mera, who became Ortega’s first wife. The married couple never appeared together

in public; nor did they let their two children be pictured by intrusive paparazzi. Their clothing

business was the only affair they were busy with. Together with Rosalina Mera, Amancio Ortega

integrated GOA into Inditex, the holding group of a number of popular brands. Founded in 1985

and floated onto the stock exchange in 2001, Inditex group, a Spanish clothing seller, owns Zara,

Pull and Bear, Massimo Dutti, and Bershka brands.

However, in 1986 Amancio Ortega divorced Rosalina Mera (28 January 1944 – 15 August

2013). His second wife, Flora Pérez

Marcote, 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 farther; 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 hobby, the

loving farther 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, Madrid. Xabier Blanco

and Jesús Salgado have co-authored Ortega’s non-official

biography, the book called “Amancio Ortega: From Zero to Zara”

(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 English language under the title The Man from

Zara: The Story of the Genius Behind the Inditex Group.

Lifestyle

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 $66.4 billion as of December 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),

which in turn made Zara a globalizer with its 1,700 storefronts in 86 countries. 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 is

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 coming Zara collection.

In 2012, Ortega asked the vice-president of Inditex, Pablo Isla, to take his place of the Inditex’s

chairman. 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. Forbes

top list persona 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, Loreta García, one of

Inditex managers, reports that they never attend

fashion shows, but listen to customers spotting new

tastes, Amancio Ortega still performing as the main

muse and inspiration for the whole corporation.

Covadonga O'Shea, Ortega’s friend and his biographer, mentions that Amancio like 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.

Xabier R. Blanco, a Spanish journalist, who wrote an unauthorized biography of Amancio

Ortega Gaona, states: “Poverty clearly made him who he is. There was hunger. Show me any

great boxer who didn’t come from this kind of background.” Unprivileged childhood conditions

and no MBA degree obtained have obviously 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.

Unique Business Model of Zara

Ventured into clothing retail since early juvenility, Amancio Ortega Gaona launched his own

company, 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. Few years after Inditex holding company was

formed, 1988, 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: 1991 – Pull & Bear, and Massimo

Dutti; 1994 – Stradivarius; 1998 – Bershka; 2000 –

Oysho; 2008 – Uterqüe. 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 a fashion empire. The Spanish

Inditex corporation has become a global fast fashion retailer with its 92,000 employees

employed in 6,500 shops, which are currently located in 88 countries, the annual sales being over

€18.1 billion. 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. There was such an incident on Manhattan, where Zara white jackets were not

loyally met by the clientele. As soon as sales staff discovered that the latest prefer cream color,

the white ones were withdrawn, and the model reissued in cream tones, which in turn was a

success. There is a term “location-specific customisation”, and for Zara the term “Zaramisation”

is quite suitable as well.

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 definite 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, Inditex group has its production in China and Morocco as well, - which

makes it possible to increase the production overnight.

Amancio Ortega Investing

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 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, Rosalina Mera, Ortega founded 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 still

performs on the position of the president of the foundation. PAIDEIA 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

"Grand Cross of 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. Moreover, Ortega has recently purchased

another USD $60-million stake (the first one cost

US$105 million) in Barcelona’s prime real estate,

which hosts Apple flagship store. Purchasing real

estate locations in London’s West End, Meatpacking

District of NYC, Barcelona’s best shopping areas, and

Beverly Hills’ Rodeo Drive, Amancio Ortega has

presumably spent USD $1 billion back in 2014.

Bidding with the owner of London’s Tower Place,

Rockefeller Center, and the Chrysler Building,

Tishman Speyer, for the 43-floor Picasso Tower,

Madrid’s famous office building, Amancio Ortega

won. His USD $556-million offer was accepted, and

Amancio Ortega Gaona paid all cash.

The unemployment in Spain being at a critical level even now, 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. Currently, Amancio Ortea 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 empire being unclear, the businessman spent somewhere

around USD $6 billion in 2014 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.