13 NOVEMBER 2002

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Sliema’s Zara outlet a big hit

Zara, the Spanish clothing sensation, has hit Malta. As soon as the doors of the new 2,000 square metre Sliema shop were thrown open last Saturday morning, people flooded through, whipping clothes off the racks, crowding the cash tills and the changing-rooms, and causing stocks to deplete at an astounding rate.

"We were astonished," says Paul Gauci, one of the three low-profile Big Bon brothers who own the franchise. "We must have seen thousands of people go through the shop over the course of Saturday, and thought ‘Well, it’s the weekend’. But then it was just like that on Monday too. We hadn’t advertised at all, but the word got round, and people were calling each other on mobile phones, from the shop floor. It was incredible. As you can imagine, we were delighted. It just goes to show that people will buy when they are given exactly what they want. And they wanted Zara."

People who went to the twos-storey shop on Saturday have remarked on the sense of excitement. "It was like the first day at the Harrods sale," one woman said. "But everyone was very well behaved, and they didn’t need to call the police to keep the crowds in order. There were whole families there – it was amazing." Taking up the whole of the former Alhambra cinema site, Zara is Malta’s largest clothing franchise, stocking stylish, good-value fashion for men, women and children. It is staffed by 70 sales assistants, which is an extraordinary number by Maltese market standards. "You must have a fast-selling product to maintain that kind of payroll and such large premises in a prime location," says Paul Gauci. "We knew Zara was the right one, because their franchises are a sensation in every market the world over. We worked hard to secure the franchise for Malta, and we’re pleased and proud at the welcome Maltese customers have given it. We are happy to see them happy."

Zara is the world’s fastest-growing retailer. Over the past six years, the number of its stores has risen from 180, mainly in Spain, to close to 800 the world over. Revenues have grown exponentially, and have cemented the position of its majority shareholder, the reclusive Amancio Ortega Gaona, as Spain’s wealthiest man. Mr Ortega started the business with just 5,000 pesetas.

At the heart of Zara’s success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. This gives the clothing giant more flexibility than its rivals when it comes to fickle fashion trends. It can make a new line from start to finish in just three weeks, against an industry average of nine months. "Vertical integration has gone out of fashion in the consumer economy," says Richard Hyman of Verdict, a retail consultancy in London. "Zara is a spectacular exception to the rule."


Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
Tel: (356) 21382741-3, 21382745-6 | Fax: (356) 21385075 | e-mail: editorial@networkpublications.com.mt