Case | HBS Case Collection | June 2013 (Revised March 2014)

Inditex: 2000

by John R. Wells and Galen Danskin

Abstract

In 2000, Inditex was one of the largest specialty apparel retailers in the world, with $2.4 billion in sales from 1,080 stores across 33 countries. Zara, Inditex's main brand, produced popular designer items at a fraction of design-house prices and could push an item from design to display in less than two weeks. This left most other fashion retailers, who took between 9-12 months for this process, far behind. However, Inditex was still only one-sixth the size of the world's largest specialty retailer, US-based Gap, and two-thirds the size of its Swedish rival, H&M. Amancio Ortega, Inditex's notoriously private Chairman and founder, was committed to challenging these industry leaders. This expansion required more capital and, in July 2000, the company announced it would IPO in 2001. There was also the question of a new management team to take the company forward. Ortega was approaching retirement as was the CEO, José Maria Castellano. The first attempt to find a younger CEO had failed. Hopefully, an IPO would attract a new management team that could maintain Inditex's rapid expansion.

Keywords: fashion; Fashion Industry; succession; IPO; Competition; Initial Public Offering; Multinational Firms and Management; Management Succession; Growth and Development Strategy; Apparel and Accessories Industry; Retail Industry;

Citation:

Wells, John R., and Galen Danskin. "Inditex: 2000." Harvard Business School Case 713-538, June 2013. (Revised March 2014.)