Inditex (Zara’s parent company) recently overtook Gap in sales. Because I associate Gap as such an iconic global brand, this news was surprising, and took a few moments to process.
According to UK publication, The Guardian:
“Spanish fashion chain Zara has expanded so rapidly in recent months that it has overtaken its main US rival Gap to become the world’s largest clothing retailer. Beloved by proponents of fast-fashion, Zara has spread its reach across the globe at a time when Gap has suffered from plummeting consumer spending in the US.
Inditex, Zara’s parent company, recorded a 9% increase in sales to €2.218bn in the first quarter of its financial year. It also benefited from the strength of the euro to edge slightly ahead of Gap which saw its revenues fall by 10% and recorded sales of €2.169bn in the same period. The difference may be tiny, but Inditex claims it is significant: for the first time the Spanish group has inched past its American rival.”
The tactics behind Zara’s rapid expansion and growth are interesting to further explore. Advertising is rare, but instead the chain relies on its physical store locations to act as billboards for the product and brand.
The Guardian continued, “…it follows the same ‘oil stain’ pattern when moving into a new market. This involves opening one ‘insignia’ store aimed at building up its name in a new location, before setting up smaller shops of different brands to reach a certain density of outlets that allows it to create economies of scale and boost profit margins. For a company which spends very little on advertising, its shops have always been its principal marketing tool, so many are purpose-built to look like fashion boutiques.”
At Gap’s 3100 stores globally vs. Intidex’s 3900, the Gap has made recent changes in efforts to boost profits and re-focus the brand. Speaking of global efforts — just this week, the UK Telegraph announced that Patrick Robinson, head designer for Gap brand, will also design for Europe going forward. This is intended to both push U.S. styling forward, portray a consistent global aesthetic, and assist in cost-cutting efforts. Read more and see many comments on Fashionista.
Despite tough times, hopefully the American chain can re-live the glory days experienced in the 1990’s…this would bring joy to many of our hearts!