Inditex Team Case Final

i
Memorandum
TO: Pablo Isia, Chaiman and CEO of Inditex
FROM: MCJI Consulting Firm (Michael Jari, Charlene Kim, Janny Wang, Israel Almeida, Ishita
Khosla)
DATE: 10/29/2015
Subject:
Background
Inditex is one of the main fashion distributors in the world, and it has eight commerical brand,
Zara, Pull and Bear, Massimo Dubtti, Bershka, Stradivarius, Oysho, Zara Home and Uterquel.
The company has over 6,700 stores in 88 contries, and the group employs an international staff
of over 110,000 professionals throughout the whole world.The first Zara shop opened in A
Coruna (Spain) in 1975, and the company is know for its sharp understanding of fashion in its
creativity, design and quick response to market demands.
Critical Issues
In recent years, the trend of fast fashion has been at a steady growth that has garnered strong
customer loyalty behind many retail apparel brands. For Inditex, same store sales have risen 9%
this past year, which is a very positive sign for the company, however, the retail apparel industry
is in its mature stage and companies including Inditex must identify ways to continually
differentiate themselves in order to have a strong lead in the market. Although Zara is a very
well-known brand in the European markets, it still lacks brand awareness in Asia, but moreso in
the American market. If Inditex does not enter these markets nor grow the brand, then potential
revenues would be lost.
Recommendations
Inditex can differentiate themselves in the market if they innovate their website to provide a
user-friendly and fun website that incorporates interactive technology to build congruency
betwen the consumer and the product. Inditex in-store sales are reaching maturity, but industry
ecommerce and mobile is in the growth stage. Big data is becoming very important for company
analysis into target markets. Inditex can utilize these platforms and create a marketing plan
utilizing big data to reach their target market more efficiently. Their marketing can grow brand
recognition and attract more consumers internationally in Asia or America. Inditex has been
dominant in Europe, but they have a large opportunity to penetrate international markets in
America and Asia. Inditex has smaller business segments and therefore are not dominating the
market like they have in Europe. Expansion in these two regions could create a large impact on
future growth.
Closing
These recommendation are based on the attached internal and external analysis of Inditex. Thank
you for your time and consideration. I look forward to discussing there findings with you on
November 2, 2015.
Attachment: ]

i
Executive Summary
The following report is a comprehensive internal and external analysis of Inditex’s
present position in the retail apparel industry and provides strategic recommendations that will
address several ways that Inditex can facilitate a continued growth under the ever-changing
industry trends. The internal analysis consists of a SWOT Analysis, VRIO Framework, and Case
analysis. The external analysis consists of Porter’s Six Forces Analysis, Competitor Map, and
Competitive Industry Analysis. For the internal analysis (SWOT & Six Forces), components of
the analysis are labeled a High (H), Medium (M), and Low (L) level to indicate strength of the
resource and trend stated. IS and CS are used to indicate industry special and company special.
The majority of information that was gathered originated from the Inditex Company website,
annual report, Mergent Online, which provides company data, and IBIS World, which provides
information for industry analysis and statistics.
The SWOT analysis shows Inditex’s strengths, weaknesses, opportunities, and threats.
The information collected for the SWOT provides both company and industry specific
information in order to indicate what Inditex is doing well and its performance compared with
the entire industry. The Case Analysis analyzes the information collected for the SWOT Analysis
and provides insight on what Inditex should do in terms of confronting & avoiding threats and
exploiting & searching for opportunities. The VRIO looks at the company’s core resources and
capabilities to see if they are being fully utilized; this also shows if the company’s resource is
bringing more value or not.
The Six Forces Analysis describes the potential entrants of the coffee shop industry,
supplier power, rivalries, buyer power, complements, and substitutes. The Competitor Analysis
provides more specific details on Inditex’s performance in relation to its competitors in wide
range of segments within the retail apparel industry. The report also includes a Competitor Map,
which offers direct comparison with their segment of operation. The Industry Analysis
specifically oversees the industry in the degree of technology, how fast the industry has
innovated since the start, what the general level of management is, the product life cycle, what
stage in the product life cycle the industry is in, and analyze how concentrated the company is in
the industry.
With the amount of information gathered to analyze Inditex and the retail apparel
industry, the report offers strategic recommendations that Inditex should highly consider taking
action upon. The recommendations include an expansion of ecommerce sales, increase in
advertising, and international expansion.

ii
Table of Contents
Executive Summary ………………………………………………………………………………………….……i
Table of Contents…………………………………………………………………………………………………....ii
Internal Analysis
SWOT Analysis…………………………………………………………………………………………….1
VRIO Framework…………………………………………………………………………………………5
Case Analysis……………………………………………………………………………………………….8
External Analysis
Porter’s Six Forces Analysis …………………………………………………………………………11
Competitive Industry Analysis.……………………………………………………………………..14
Competitor Map…………………………………………………………………………………………..21
Strategic Recommendations……………………………………………………………………………………29
Works Cited……………………………………………………………………………………………………………32
Exhibits
Key Executive Bios…………….…………………………………………………………………………44
Financial Statements……………………………………………………………………………………46

1
SWOT Analysis
Strengths Weaknesses
Brand Image
 Successfulretail stores.1 H
 World's biggest fashion retailer in terms of sales.2 H
 Fastest-expanding affordable fashion clothing makers.3 H
 Zara, only brand from Spain in top 100 valuable brands.4 M
 Zara, the second most valuable brand after Google.5 H
 Each customer at least 17 visits in a year in its 1,039 stores.6 L
Locations
 Over 6,600 stores throughout the world in 88 countries.7 H
 >400 stores annually on average over the past 5 years.8 M
 A new Zara Kid’s division- 162 stores in four countries.9 L
Brands Strategy
 Deliver in 3 weeks, design new models 3 or 4 times a day.10 ,11 L
 Vertical integration, designs, produces,distributes.12 ,13 M
 Expansion of Zara Home a "particular highlight."14 M
 Changes stock twice a week, orders arrive in 48 hours; Cutting the
standard production process from 6 months to 2 weeks.15, 16 H
 51pc-55pc of Zara manufactures in “proximity” markets, Spain,
Portugal, Turkey and Morocco,instead ofAsia.17 L
 Leader in digital visuals for the High Street; Each product shot
comes with beautifully styled outfits.18 H
Financials
 Gross margin to 59.4 percent from 58.9 percent.19 M
 First-half net profits surged 26% to €1.16bn (£846m)20 M
 Sales rose 17% to €4.37bn.21 H
 Net sales > 8% to $19.2 billion over 12 months to Jan.3122 M
 EBIT Margin of 18% and is 66% of total company profits.23 L
 Zara net income rose 28% in the first quarter through April.24 H
Competitors
 Zara launches 11,000 new items, H&M&Gap: 2,000-4,000.25H
 2014, Zara sales $19.7 B, Uniqlo $16.6 B, Gap $16.4 B26 M
Market Focus:
 Overdependence of European and Domestic Market; 65% of sales
originate in this region.27 H
 Inditex Market Size in North America very small compared to
outside regions.28 H
Other Brands:
 Lesser known subsidiary brands.29 M
Financial Information:
 Decrease of ROE %: 28 (2012) to 25.42 (2015).30 M
 Decrease of ROA %: 18.59 (2012) to 17.17 (2015)31 M
 Decrease of ROI %: 47.18 (2012) to 41.67 (2015).32 M
Zara Pricing & Position:
 High pricing as luxury brand; increasing demand for cheaper
fashion.33 L
 New stores not match sales of flagship stores; 35% profit down.34M
 Fast Fashion trend decline; Y-O-Y growth decrease by 5%.35 H
Brand Image:
 Zara accused of customer discrimination.36 H
 Anti-Semitism design hurts Zara reputation.37 H
 Zara investigated for using sweatshops &child labor.38 H
 Zara scandalon plagiarism & copyright issue.39 H
Very Little Advertising:
 Zara spends just 0.3% of sales on ads,compared with the 3-4%
spent by rivals.40 M
Struggle in American Market
 Zara sells trendy cuts and slim fits.41 L
 Americans prefer classic, roomier clothes.42 L
 Obesity rates low in Europe and nonexistent in Asia.43 L
International Expansion
 Of 88 countries, only 55 stores in the United States – 53 Zara stores
and 2 Massimo Dutti stores.44 M
Opportunities Threats
Expansion Opportunities: H
 Expansion of online sales platform.45 CS
 Focus on expansion in the Americas.46 CS
Business Model: L
 Zara’s dominance in fast fashion; quicker production.47 CS
Market Trends: M
 Over 5 years to 2015, international trade is estimated to grow at an
annualized rate of 1.8% to $447.8 billion.48 IS
 Forecast B2C ecommerce sales worldwide to increase yearly.49 IS
 Industry revenue for Global Apparel Manufacturing sector to grow at
an annualized rate of 3.0% to $715.2 billion.50 IS
Better Brand Image: M
 Promote Eco-Friendly vision and work towards more sustainable
ways to manufacture product.51 CS
 Profit opportunity,world price of cotton anticipated to stabilize,
steadying operator’s purchasing costs,organic cotton is one of
Inditex’s main raw materials.52 CS
 More time to social programs for community development.53 CS
Asia Market: H
 Trend to produce for Asian & European market instead of Western
economy.54 IS
 Growing middle class in China, Chinese consumers become focal
point in industry.55 IS
 Asia Pacific, China the best opportunities; China generate 41%
growth in apparel, footwear specialist retailers - 2019.56 IS
New Brand Impact: L
 Cannibalization of high price sensitivity brands with new low-key
store called “Lefties,” cuts product prices.57 CS
Slave labor Lawsuit: M
 August 2011, >30 Zara factories in São Paulo, Brazil.58 CS
 1.5 years later in Buenos Aires, 3 outsourced factories found
forcing its employees in slave-like conditions.59 CS
Discriminatory Lawsuit: M
 Damages >$40 million.60 CS
 Discriminated employee for being Jewish, American & gay.61CS
Chinese market: H
 Competitive international brands like H&M.62 CS
 Zara label as superior and high-end and failed competing with real
high-end brands like Hermes and Chanel.63 CS
 Competitive domestic fashion brands as they localize to narrow gap
with international fashion brands.64 CS
 > 1/3rd of Zara sample products not meet national quality standards
due to inconsistencies in product quality control.65 CS
Fashion Industry pressures:L
 Competitive environment, excessive inventory, trends are fickle,
ever-changing and often elusive66 IS
 Fall in the euro rate leads year-round discounting,boarded up
windows in shops and empty retail spaces.67 IS
 Troubled economy, professors advise not start own labels68 IS
 Young new designers-financial and commercial pressure.69IS

2
SWOT Endnotes
1 "Brands." Zara. https://www.inditex.com/brands/zara.
2 "Zara Surpass H&M in Market Capitalisation." Zara Surpass H&M in Market Capitalisation. July 19, 2011.
http://www.swedishwire.com/business/10667-zara-surpass-ham-in-market-cap
3 "The Future of Fast Fashion." The Economist. June 18, 2005. http://www.economist.com/node/4086117
4 "Zara Branding Strategy." World Finance. http://finance.mapsofworld.com/brand/value/zara.html
5 Ibid.
6 Ibid.
8 "Inditex Net Income Rises Most in Two Years on Zara Expansion." Bloomberg.com. June 19, 2015.
http://www.bloomberg.com/news/articles/2015-06-10/inditex-first-quarter-net-jumps-as-zara-owner-adds-more-
stores
9 "Zara Leads In Fast Fashion." Forbes. March 30, 2015.
http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/.)
10 Ibid.
11 Ibid.
13 "Zara Retail Stores Mission Statement, Values for Globally Sustainable Business." About.com Money.
http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Zara-Retail-Stores-
Mission-Statement.htm
14 "Zara Owner Profits up on Sales Surge - BBC News." BBC News. June 10, 2015.
http://www.bbc.com/news/business-33076564.
15 "Inditex's Zara And The Power Of Comparative Advantage." Forbes. June 7, 2015.
http://www.forbes.com/sites/timworstall/2015/06/07/inditexs-zara-and-the-power-of-comparative-advantage/)
17 "How Zara Became the World's Biggest Fashion Retailer." The Telegraph.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11172562/How-Inditex-became-the-
worlds-biggest-fashion-retailer.html
18 "Bustle." Bustle. http://www.bustle.com/articles/44607-4-reasons-zara-is-the-only-store-that-needs-to-exist.
19 Inditex Net Income Rises Most in Two Years on Zara Expansion." Bloomberg.com. June 19, 2015.
stores.
20 "Zara Parent Inditex Half-year Profits Jump 26% to €1.16bn." Retail Week. September 16, 2015.
http://www.retail-week.com/sectors/fashion/zara-parent-inditex-half-year-profits-jump-26-to-
116bn/5079156.article?blocktitle=Zara:-Latest-news-and-insight&contentID=9719.
21 "Zara Owner Profits up on Sales Surge - BBC News." BBC News. June 10, 2015.
http://www.bbc.com/news/business-33076564.
22 INDVIK, LAUREN. "ZARA IS STILL GROWING, BUT NOT AS FAST AS H&M." Fashionista. March
18, 2015. http://fashionista.com/2015/03/inditex-zara-2014-earnings.)
stores.
26 Ibid.

3
27 Inditex, “Inditex Annual Report,” 2014,
http://www.inditex.com/documents/10279/18789/Inditex_Annual_Report_2014_web.pdf/a8323597-3932-4357-
9f36-6458f55ac099, accessed October 2014
28 "Inditex." Passport. http://www.portal.euromonitor.com.lib.pepperdine.edu/portal/analysis/tab.
29 Schuessler, Bobby, “The Zara-Owned Shopping Sites You’ve Never Heard of Before,” May 26, 2015,
http://www.whowhatwear.com/zara-sister-website/, accessed October 2015
30 Mergent Online, “Inditex Company Financials,” (2015),
http://www.mergentonline.com.lib.pepperdine.edu/companyfinancials.php?pagetype=ratios&compnumber=105
168&period=Annuals&range=5&Submit=Refresh, accessed October 13, 2015
31 Ibid.
32 Ibid.
33 Leary O’ Elisabeth, “Primark expands on rival zara’s home turf with Spanish flagship store,” October 13,
2015, http://www.cnbc.com/2015/10/15/reuters-america-primark-expands-on-rival-zaras-home-turf-with-
spanish-flagship-store.html, accessed October 2015
34 Malviya, Sagar, “ Zara posts 35% profit decline as new stores couldn’t match sales of flagship stores.”
October 22, 2014. http://articles.economictimes.indiatimes.com/2014-10-22/news/55318913_1_inditex-trent-
zara-elargir-solutions, accessed October 2015
36 Gajanan, Mahita, “Zara accused of creating culture of customer discrimination in new report,”June 22, 2015,
http://www.theguardian.com/us-news/2015/jun/22/zara-reports-culture-of-favoritism-based-on-race, accessed
October 2015
37 Saul, Isaac, “Is the ‘Zara’ Clothing Line Working Anti-Semitism Into Their Products?” August 27, 2014,
http://aplus.com/a/zara-holocaust-uniforms-swastika-purse, accessed October 2015
38 Osborne, Lucy, “High-Street Fashion store accused of using slave labour at factories in Argentina,” April 3,
2013, http://www.dailymail.co.uk/news/article-2303358/High-street-fashion-store-Zara-investigation-use-slave-
labour-factories-Argentina.html, accessed October 27, 2015
39 Fastexposure, “The Fine Line between inspiration and plagiarism,” April 23, 2012,
https://fastexposure.wordpress.com/2012/04/23/the-fine-line-between-inspiration-and-plagiarism/, Accessed
October 25, 2015
stores.
42 Ibid.
43 Ibid.
9f36-6458f55ac099
46 Inditex, “Inditex Interim Half 2015 Results,” 2015,
https://www.inditex.com/documents/10279/189898/INDITEX+1H2015+Results.pdf/5a3b2c18-3bb4-492b-
9659-11c03f5bd664
47 Petro, Greg, “The Future of Fashion Retailing, Revisited: Part 2- Zara,” July 23, 2015,
http://www.forbes.com/sites/gregpetro/2015/07/23/the-future-of-fashion-retailing-revisited-part-2-zara/,
accessed October 2015
48 Ibisworld, “Global Apparel Manufacturing” – Industry Performance
49 Statista, “B2C ecommerce sales worldwide from 2012-2018”n.d.
http://www.statista.com/statistics/261245/b2c-e-commerce-sales-worldwide/ , accessed October 2015
50 Ibisworld,”Global Apparel Manufacturing”- Industry Outlook

4
51 Inditex Annual Report
52 Ibisworld, global apparel manufacturing, industry outlook
53 Inditex, “Investment in Social Programmes,” 2014,
https://www.inditex.com/en/sustainability/community/social_investment_indicators
54 IbisWorld, global apparel manufacturing, industry outlook
55 Ibisworld, global apparel manufacturing industry outlook
57 Ibid.
58 ("Clothing Calamity: A Crisis Case Study on Slave Labor Allegations Against Spanish Retailer Zara." , ASU
NC DOCKS (North Carolina Digital Online Collection of Knowledge and Scholarship). August 21, 2015.
http://libres.uncg.edu/ir/asu/listing.aspx?id=18362.)
59 Ibid.
60 INDVIK, LAUREN. "ZARA DISCRIMINATION LAWSUIT PAINTS AN UGLY PICTURE OF ITS
CORPORATE CULTURE." Fashionista. June 4, 2015. http://fashionista.com/2015/06/zara-discrimination-
lawsuit.
61 Ibid.
62 Sun, Ricky. "Big Challenges and Opportunities - Business - China Daily Asia." Big Challenges and
Opportunities - Business - China Daily Asia. February 24, 2014. http://www.chinadailyasia.com/business/2014-
02/24/content_15120150.html
63 Ibid.
64 Ibid.
65 Ibid.
66 Capozzi, Catherine. "Risks of Starting a Clothing Store." Small Business.
http://smallbusiness.chron.com/risks-starting-clothing-store-22444.html.)
67 Ibid.
68 "The Euro Zone Crisis and U.K. Fashion - Apparel Insiders." Apparel Insiders. March 13, 2012.
http://www.apparelinsiders.com/2012/03/the-euro-zone-crisis-and-u-k-fashion/)
69 Ibid.

5
VRIO Framework
Resources Valuable? Rare? Costly to
Imitate?
Exploited by
organization?
Competitive
Implications
SuccessfulRetail Stores (Strength) YES NO NO YES CP
-Zara, Pull&Bear, Massimo
Dutti, Bershka, Stradivarius, Oysho,Zara Home, Uterqüe,
Lefties.1
Biggest Brand, Zara (Strength) YES YES YES YES SCA
- Only brand from Spain in top 100 valuable brands in the
world. 2
- The second most valuable brand in the world with respect
to growth after Google.3
Struggle in American Market (Weakness) YES NO YES NO CP
- Of 88 countries,only 55 stores in the United States – 53
Zara stores and 2 Massimo Dutti stores.4
Efficient Delivery (Strength) YES YES YES YES SCA
-Deliver in three weeks from own factories.5
- Zara orders arrive within 48 hours.6
Design Updates (Strength) YES YES YES YES SCA
- Design new models three or four a day.7
- Zara changes stocktwice a week.8
Market Focus (Weakness) YES YES YES NO TCA
-Overdependence of European and Domestic Market; 65%
of sales originate in this region.9
-Inditex Market Size in North America very small
compared to outside regions.10
High Zara Pricing (Weakness) NO - NO NO CD
-High pricing as a luxury brand; but increasing demand for
cheaper fashion.11
-Pricing tailored to characteristics of each regional
market.12
Global Presence (Strength) YES YES YES YES SCA
- Inditex investing in 49 markets.13
- China:132 new stores,USA:46 new stores. 14
Online Store (Strength) YES NO YES YES CP
-Leader in digital visuals for the High Street15
- Each product shot with styled outfits16
Supply chain (Strength) YES YES YES YES SCA
- 51pc and 55pc of Zara manufactures in “proximity”
markets, Spain, Portugal, Turkey and Morocco, instead of
Asia.17
- Cutting the standard fashion industry mass production
process from 6 months to 2 weeks; Vertical integration18,19
Amancio Ortega (Strength)
YES YES NO YES TCA
- Third-richest man on earth.20
- His rule: Give customers what they want, and get it to
them faster than anyone else.21
Number of Stores (Strength)
YES YES YES YES SCA
-Over 6,600 stores throughout the world.22
-Opened >400 stores annually on average over the past
five years.23
- 1923 Zara store in leading cities across 88 countries.24
Clothing Quality (Weakness)
YES YES YES NO TCA- Zara’s clothing quality declining.25
-Clothes are designed to have a short lifespan.26
Competitive Implications; CD=Competitive Disadvantage, CP=Competitive Parity, TCA=Temporary Competitive Advantage,
SCA=Sustained Competitive Advantage

6
VRIO Endnotes
3 Ibid.
9f36-6458f55ac099, accessed October 2014
11 Leary O’ Elisabeth, “Primark expands on rival zara’s home turf with Spanish flagship store,” October 13,
2015, http://www.cnbc.com/2015/10/15/reuters-america-primark-expands-on-rival-zaras-home-turf-with-
spanish-flagship-store.html, accessed October 2015
12 Malviya, Sagar, “ Zara posts 35% profit decline as new stores couldn’t match sales of flagship stores.”
October 22, 2014. http://articles.economictimes.indiatimes.com/2014-10-22/news/55318913_1_inditex-trent-
zara-elargir-solutions, accessed October 2015
13 "The Strategic Retail Genius Behind Zara." Forbes.
http://www.forbes.com/sites/lydiadishman/2012/03/23/the-strategic-retail-genius-behind-zara/.
14 Ibid.
15 "Bustle." Bustle. http://www.bustle.com/articles/44607-4-reasons-zara-is-the-only-store-that-needs-to-exist.
16 Ibid.
17 "How Zara Became the World's Biggest Fashion Retailer." The Telegraph.
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11172562/How-Inditex-became-the-
worlds-biggest-fashion-retailer.html
20 "Meet Amancio Ortega: The Third-richest Man in the World." Fortune Meet Amancio Ortega The
Thirdrichest Man in the World Comments. January 8, 2013. http://fortune.com/2013/01/08/meet-amancio-
ortega-the-third-richest-man-in-the-world/.
21 Ibid.
stores.

7
25 Saul, Isaac, “Is the ‘Zara’ Clothing Line Working Anti-Semitism Into Their Products?” August 27, 2014,
http://aplus.com/a/zara-holocaust-uniforms-swastika-purse, accessed October 2015
26 Ibid.

8
Case Analysis
Strengths Weaknesses
T
h
r
e
a
t
s
Confront Avoid
 Fashion Industry: In response to the ever
changing market trends (T)1 Zara, as the
fastest expanding fashion clothing maker,
should respond by increasing the stock
production process,which currently
changes stocktwice a week, and orders
arrive in 48 hours. (S) 2 ‘ 3
 Asian Market: As there are increasing
international competition in the Chinese
market (T)4, Zara can confront the threat
by increasing its advertising & marketing
to raise brand awareness as the second
most valuable brand in the world to attract
more customers. (S, 13) 5
 Brand Reputation: As recent incidents
have caused Zara to make public
statements of apology for its clothing
designs,customer/ employee relations,
and exploitation of labor (W) 6 ‘ 7’ 8,
Inditex should avoid any further
complaints & lawsuits (T) 9’ 10 by doing
an overview of the company & supply
chain.
 Subsidiary Brands: As Inditex has
many lesser- known brands otherthan
Zara (W) 11, its new addition of its
cheaper alternative, “Lefties,” may take
away some of its current customer base
from its high end stores.(T) 12 Inditex
should continue keeping low-profile
and focus on a different target market
for this brand to avoid this threat.
O
p
p
o
r
t
u
n
i
t
i
e
s
Exploit Search
 Greater Production Potential: Zara has a
faster production cycle than that of its
nearest competitors (S) 13’ 14 and should
exploit its quicker production capability to
raise more profit. (O) 15
 Online Expansion: Zara should exploit its
digital visuals for High Street Fashion that
captures high quality shots ofits products
(S) 16 to improve & expand its online
platform. By doing so, it can generate a
greater number of human traffic to its online
stores.(O) 17
 New Market Focus: As Inditex has
65% of its sales originating from the
European/Asian Markets (W) 18, there
should be plans of store expansion in
the Americas as that market has a lot of
potential for new sales (O) 19 as
currently, there are only 55 stores in the
United States.(W) 20
 Online Marketing: As B2C
ecommerce sales are expected to
increase worldwide yearly (O) 21, Zara
should take advantage of the online
platform and creatively advertise its
products,as currently Zara spends just
0.3% of sales on ads,compared with
the 3-4% spent by rivals (W) 22.

9
Case Analysis Endnotes
1 Capozzi, Catherine. "Risks of Starting a Clothing Store." Small Business.
http://smallbusiness.chron.com/risks-starting-clothing-store-22444.html. Accessed October 2015.
http://www.forbes.com/sites/timworstall/2015/06/07/inditexs-zara-and-the-power-of-
comparative-advantage/. Accessed October 2015.
3 "Zara Retail Stores Mission Statement, Values for Globally Sustainable Business."
About.com Money. http://retailindustry.about.com/od/retailbestpractices/ig/Company-
Mission-Statements/Zara-Retail-Stores-Mission-Statement.htm. Accessed October 2015.
4 Sun, Ricky. "Big Challenges and Opportunities - Business - China Daily Asia." Big
Challenges and Opportunities - Business - China Daily Asia. February 24, 2014.
http://www.chinadailyasia.com/business/2014-02/24/content_15120150.html. Accessed October
2015.
5 "Zara Branding Strategy." World Finance.
http://finance.mapsofworld.com/brand/value/zara.html. Accessed October 2015.
6 Gajanan, Mahita, “Zara accused of creating culture of customer discrimination in
newreport,”June 22, 2015, http://www.theguardian.com/us-news/2015/jun/22/zara-reports-
culture-of-favoritism-based-on-race, accessed October 2015
7Saul, Isaac, “Is the ‘Zara’ Clothing Line Working Anti-Semitism Into Their Products?”
August 27, 2014, http://aplus.com/a/zara-holocaust-uniforms-swastika-purse, Accessed October
2015
8 Osborne, Lucy, “High-Street Fashion store accused of using slave labour at factories in
Argentina,” April 3, 2013, http://www.dailymail.co.uk/news/article-2303358/High-street-
fashion-store-Zara-investigation-use-slave-labour-factories-Argentina.html. Accessed October
27, 2015.
9 "Clothing Calamity: A Crisis Case Study on Slave Labor Allegations Against Spanish Retailer
Zara." , ASU NC DOCKS (North Carolina Digital Online Collection of Knowledge and
Scholarship). August 21, 2015. http://libres.uncg.edu/ir/asu/listing.aspx?id=18362. Accessed
October 2015.
10 INDVIK, LAUREN. "ZARA DISCRIMINATION LAWSUIT PAINTS AN UGLY
PICTURE OF ITS CORPORATE CULTURE." Fashionista. June 4, 2015.
http://fashionista.com/2015/06/zara-discrimination-lawsuit. Accessed October 2015.
11 Schuessler, Bobby, “The Zara-Owned Shopping Sites You’ve Never Heard of Before,”May
26, 2015, http://www.whowhatwear.com/zara-sister-website/. Accessed October 2015.
Accessed October 2015.
comparative-advantage/. Accessed October 2015.
14 "Zara Retail Stores Mission Statement, Values for Globally Sustainable Business."
About.com Money. http://retailindustry.about.com/od/retailbestpractices/ig/Company-
Mission-Statements/Zara-Retail-Stores-Mission-Statement.htm. Accessed October 2015.

10
15 Petro, Greg, “The Future of Fashion Retailing, Revisited: Part 2- Zara,” July 23, 2015,
http://www.forbes.com/sites/gregpetro/2015/07/23/the-future-of-fashion-retailing-revisited-part-
2-zara/. Accessed October 2015.
16 "Bustle." Bustle. http://www.bustle.com/articles/44607-4-reasons-zara-is-the-only-
store-that-needs-to-exist. Accessed October 2015.
http://www.inditex.com/documents/10279/18789/Inditex_Annual_Report_2014_web.pdf/a83235
97-3932-4357-9f36-6458f55ac099. Accessed October 2015.
97-3932-4357-9f36-6458f55ac099. Accessed October 2015.
19 Inditex, “Inditex Interim Half 2015 Results,” 2015,
https://www.inditex.com/documents/10279/189898/INDITEX+1H2015+Results.pdf/5a3b2c18-
3bb4-492b-9659-11c03f5bd664. Accessed October 2015.
http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/. Accessed
October 2015.
21 Statista, “B2C ecommerce sales worldwide from 2012-2018.” n.d.
http://www.statista.com/statistics/261245/b2c-e-commerce-sales-worldwide/. Accessed October
2015.
22 "The Future of Fast Fashion." The Economist. June 18, 2005.
http://www.economist.com/node/4086117. Accessed October 2015.

11
Six Forces Analysis- Retail Apparel Industry
Threat of NewEntrants: (Low)
Supply-Side Economics of Scale: Buyers with very large purchasing power can make contracts to reduce cost of goods.1
(L)
Demand Side Benefits of Scale: Stores build a large base number of consumers to increase efficiency and profits.2
There is a
much higher sales in large volume locations.3
(L)
Customer Switching costs: Due to the low level of product differentiation, customers face low switching costs when switching
between retailers.4
(H)
Capital Requirements: High capital requirements in order to open and effectively run a large store.5
(L) Capital requirements
for establishing a solid brand reputation can be costly.6
(L)
Incumbency Advantage: Incumbents have established relationships with suppliers that allow Incumbents to pay the most
competitive price.7
(L)
Distribution Channels: Incumbents have excising distribution and networks between department stores and the suppliers. 8
(L)
Government Policy: If government enacts contractionary policies that reduce disposable income, the industry will suffer.9
Companies must comply with the Fair Labor Standards Act and various state laws governing various matters such as minimum
wage, overtime and other working conditions.10
International countries often have high taxes and tariffs in order to discourage
foreign products. 11
(L)
Power ofSuppliers: (Low) Power ofBuyers: (LowTo Moderate) Rivalry: (Moderate to High)
Switching Costs: Large number
of suppliers in manufacturing and
wholesale.12
(L) Stores can
outsource their production
offshores.13
(L)
Industry Dependence: Suppliers
are heavily dependent on the
buyers to purchase high volume of
apparel.14
(L)
Product Uniqueness: Many
buyers work with as many as 900
independent suppliers that each
can produce an identical product.15
(L)
Supplier Industry integration:
High labor intensive
manufacturing due to complexity
of product.16
(H)
Size of Buyer: There are a large number
of individual buyers. The loss of one buyer
will have little to no effect on the
revenues.17
(L)
Product Uniqueness/Substitutes: There
is brand loyalty within high-end designer
products.18
(L) Customer will look for
substitutes due to price sensitivity;
however price sensitivity will vary by
socioeconomic status and lifestyle.19
(H)
Switching Costs: Snitching costs for price
sensitive buyers is extremely low. Price
sensitive buyers will switch to the firms
that are considered to be the best
bargains.20
(H)
Vertical Integration: There is little to no
risk that buyers will vertically integrate
due to the high cost in producing clothes.
There is a small number of individual who
do make there own clothing. (L)21
Industry Growth: Retail apparel industry
is expected to grow slightly over the next
few years averaging a little over 4%.22
(M)
Size and Power of Competition: Large
stores had larger sales, lower expenses, and
more business profits.23
If the larger stores
cannot reach enough base volume, they
cannot operate efficiently.24
(M)
Barrier for Exit: With merchandise and
labor accounting for the majority of
expenditures. There is a low cost to exit an
industry.25
Long Term Lease Agreements
can prevent firms from exiting the industry.
Average Length of a lease is 5 Years.26
(M)
Brand Recognition: Developing a
powerfulbrand will differentiate among
competitors and will be viewed as brand
equity by the consumer.27
(H)
Number of Competitors: High
competition, increasing number of
competitors.28
(H)
Threat of Substitutes: (High to Moderate) Threat of Complements: (Moderate to High)
Current Trends: Stores declining in growth to due large
volume of consumers switching to online providers.29
Consumers receive a huge convenience purchasing products
online.30
(H)
Economical Factors: During weaker economic times, lower
disposable incomes lead consumers to purchase at outlets.31
(H)
Second Hand Clothing: Customers can purchase from
second hand stores such as Goodwill or the Salvation Army.32
EBay has become one of the largest second hand clothing
retailers. (M)
Clothing Rentals: According to Bloomberg the tuxedo rental
business is slowly declining.33 Declining Annually at -1.6 per year. 34
(L)
Homemade clothes: Individual can make their own custom
clothes or recycle and mend old clothing.35
(L)
Exploiting Locations: Malls have been a great location for
fashion stores but recently have been experiencing declines.36,
37
(H)
Seasonal Complements: Retailstore sales spike during the
holidays.38
(H)
Fit Software: Fit software is 3D software that allows users to
view and try on clothing virtually.39
This software will
eliminate the risk of online shopping.40
(M)
Social Media: Designers now use instagram as a way to
advertise and promote their brand.41
(M)
Celebrities: Celebrities have the ability to shape and
influence what consumer purchase.42
(H)
Technology: RFID tags can be used to enhance customer
shopping.43
(M)

12
Six Forces Analysis Endnotes
1 Source: Department Stores in the US, IBISWorld, Accessed October 2015. Page 5
2 Burnham, Elizabeth A. 1940. "THE DEPARTMENT STORE IN ITS COMMUNITY." Harvard Business
Review 18, no. 4: 455. Business Source Premier, EBSCOhost (accessed October 16, 2015). Page 2
4 2015. "Global Apparel Retail Industry Profile." Apparel Retail Industry Profile: Global 1-34. Business Source
Premier, EBSCOhost (accessed October 16, 2015).’ Page 16
5 McNair, Malcolm P., and Eleanor G. May. 1953. "Department Store Expense Control." Harvard Business
Review 31, no. 3: A113-127. Business Source Premier, EBSCOhost (accessed October 16, 2015).
6 Source: Women's Clothing in the US, IBISWorld, Accessed October 2015. Page 21
11 Ikenson, Dan. "Washington's Coddling Of U.S. Textile Industry Is Hurting Shoppers." Forbes. July 23, 2013.,
http://www.forbes.com/sites/danikenson/2013/07/23/textile-protectionism-in-the-trans-pacific-partnership/
,Accessed October 29, 2015.
12"Global Apparel Retail Industry Profile." Apparel Retail Industry Profile: Global 1-34. Business Source
13 Global Apparel Retail Industry Profile." Apparel Retail Industry Profile: Global 1-34. Business Source
14 Source: Department Stores in the US, IBISWorld, Accessed October 2015.
15 Hennes & Mauritz AB "Production Process." http://about.hm.com/en/About/facts-about-hm/idea-to-
store/production-process.html,. Accessed October, 2015
16 "Global Apparel Retail Industry Profile." Apparel Retail Industry Profile: Global 1-34. Business Source
17 "Total US Retail Sales Top $4.5 Trillion in 2013, Outpace GDP Growth - EMarketer." Total US Retail Sales
Top $4.5 Trillion in 2013, Outpace GDP Growth. April 10, 2014. http://www.emarketer.com/Article/Total-US-
Retail-Sales-Top-3645-Trillion-2013-Outpace-GDP-Growth/101....Accessed October 30, 2015.
18 Schawbel, Dan. "10 New Findings About The Millennial Consumer." Forbes. January 20, 2015.
http://www.forbes.com/sites/danschawbel/2015/01/20/10-new-findings-about-the-millennial-consumer/2,
Accessed October 29, 2015.
21 "Why Is It so Difficult and Expensive to Make Your Own Clothes." ChezSkud. November 17, 2013.
http://chezskud.com/2013/11/17/why-is-it-so-difficult-and-expensive-to-make-your-own-clothes-or-have....
Accessed October 2015.
22 "Global Apparel Retail Industry Profile." Apparel Retail Industry Profile: Global 1-34. Business Source
Premier, EBSCOhost (accessed October 16, 2015).’
25 Source: Men’s Clothing in the US, IBISWorld, Accessed October 2015. Page 23
27 Kansra, Pooja. 2014. "Determinants of the Buying Behavior of Young Consumers of Branded Clothes: An
Empirical Analysis." IUP Journal Of Brand Management 11, no. 3: 57-70. Business Source Premier,
EBSCOhost (accessed October 18, 2015).

13
32 "What Competition Do You Face on the European Apparel Market?" Competition.,
https://www.cbi.eu/market-information/apparel/competition/,. Accessed October 29, 2015. .
33 Green, Dennis. "The Rental Tux Is Dying - and That's a Fantastic Thing for Menswear." Business Insider.
June 17, 2015., http://www.businessinsider.com/heres-why-the-rental-tuxedo-is-finally-dying-out-2015-6,.
34 Source: Formal Wear & Costume Retail in the US, IBISWorld, Accessed October 2015.
35 "Love Clothes Part II: Make and Mend." Recycle for Aberdeen.,
https://recycleforaberdeen.wordpress.com/2015/08/21/love-clothes-part-2-make-and-mend/,. August 21, 2015.
36 Lee, Thomas. "Downfall of the Mall: Chains like Gap and J. Crew Face Crisis." San Francisco Chronicle.
http://www.sfchronicle.com/news/article/Downfall-of-the-mall-Chains-like-Gap-and-J-Crew-6544324.php,.
October 1, 2015. Accessed October 29, 2015.
37 Source: Department Stores in the US, IBISWorld, Accessed October 2015. Page 21-21
38 "The Biggest Holidays for Spending." CNBC. March 31, 2011., http://www.cnbc.com/2011/03/31/The-
Biggest-Holidays-for-Spending.html ,accessed October 29, 2015.
39 "The New Dimension to Online Shopping." MyFit / The New Dimension to Online Shopping / Home.,
http://myfit.co/., Accessed October 29, 2015.
40 Coxworth, Ben. "App Could Take the Risk of out Buying Clothes Online." App Could Take the Risk of out
Buying Clothes Online. September 25, 2012., http://www.gizmag.com/verisize-clothes-sizing-
app/24284/,.Accessed October 29, 2015.
41 Pawlas, Marcel. "Social Media Effect on the Fashion Industry." Storify. October 1, 2015.,
https://storify.com/0marcel0/social-media-effect-on-the-fashion-industry,. Accessed October 29, 2015.
42 "Why Do Celebrities Influence Fashion Trends?" Style Flair Fashion. May 07, 2014.
http://www.styleflair.com/why-do-celebrities-influence-fashion-trends/ ,.Accessed October 29, 2015.
43 Davis, Ben. "Five Retailers Using NFC and RFID to Enhance Shopping: But Do They Work?" Econsultancy.
August 13, 2014. https://econsultancy.com/blog/65307-five-retailers-using-nfc-and-rfid-to-enhance-shopping-
but-do-the, Accessed October 29, 2015.

14
Low-level
Technology
High-level
Technology
Almost No
Innovation
Rapid
Innovation
Competitive Industry Analysis: Retail Apparel Industry
1. Degree of Technological Sophistication in industry
1 2 3 4 5 6 7 8 9 10
Evidence:
 Retailers in the industry that plan to be successful need to create a seamless experience for consumers to
shop by providing them with multiple platforms to shop including in-store, mobile, and website.1
 Many retailers, including apparel need to manage multiple social media platforms in order to target
consumers and build their brand in order to be recognized.2
 “According to eMarketer, 2013 online apparel sales were $44.7 billion accounting for 17.6% of the all
U.S. ecommerce sales. Online apparel sales are expected to nearly double to $86.0 billion by 2018”.3
 Apparel retailers need to keep in mind that the purchase decision cycle for consumers is relatively short
and consumers tend to purchase within a few days or even hours of their decision. As a result, their
technology needs to keep up with short term purchase decisions via online marketing.4
 “More than 60 percent of apparel shoppers chose product images as a top three influence on purchase,
which is 1.5 times the average across other categories.” This indicates that apparel retailers needs to
have high resolution images and incorporate models for to allow consumers to scale the products.5
 Online retailers are including “add-ons” with online purchases that will provide additional items similar
or complementary to initial customer purchases in order to encourage them to buy more product.6
 Sellers are aggregating large amounts of data from all aspects of the industry in order to keep up
improve performance, minimize waste, and essentially keep up with trends. Retail technology
companies support retail apparel to gather the data and make meaningful decisions after thorough
analysis.7
Strategic Implications:
Apparel retailers in the industry have access to large amounts of data on their consumers and current trends.
In order for retailers to keep up with the demand for new products, they need access to the technology to
synthesize effectively and efficiently. Technology in this field must be very quick and adaptable to target
consumers on multiple platforms. Online apparel sales are increasing very rapidly, and retailers need
modern technology in order to grow their ecommerce and provide consumers with a fun, simple solution to
shopping online. Marketing technology is very important because retailers need to keep their consumers
informed constantly with new products and sales. They also need to build their brand image and increase
awareness to attract more consumers using marketing technology.
2. Rate of Innovation in Industry
1 2 3 4 5 6 7 8 9 10

15
Few
Capable
Managers
Many
Capable
Managers
Evidence:
 Fashion apparel is integrating RFID technology to execute logistics better by increasing the efficiency,
quality, and productivity. Essentially, the technology is a much more successful alternative to barcodes.
This technology will significantly improve the way companies identify, trace, and track items.8
 Fashion apparel is merging with technology to create apparel that is technologically equipped. Music,
phones and more can be integrated functionally to create wearable electronics.9
 Clothing retailers are increasing their sales online via use of new IIT technology, notably VTO. This
interactive technology allows consumers to “virtually try on” clothing using their home technology.
Increasing body self-esteem and self-congruity among consumers will lead to more sales.10
 New 3D Printing technology will change the way people and can potentially threaten the retail industry.
Consumers with the power to make their own products can make a very large impact on the industry. 11
 Retailers need to innovate products to meet growing mobile trends. More people have been using their
phones to access the internet and this trend is expended to grow very rapidly.12Consumers spend 24% of
their time on mobile media, but companies only spend 8% towards advertising on mobile phones.13
 Apparel retailers are developing a digital mirror that allows you to virtually try on clothing. These
mirrors allow the user to compare clothing, add accessories, change clothing color, alter angles, and
much more.14
 Big apparel retailers are executing fast fashion to meet consumer demand for current trends in fashion.
These retailers are updating their inventory very quickly through to provide customers with new product
very frequently.15
Fashion apparel has a very fast product cycle and retailers need to be aware in order to solve problems and
catch trends. The use mobile technology will force apparel retailers to change the way they target
consumers. They will need to spend more on advertising and discover innovative ways to reach consumers
on mobile sites and applications. Consumers are very concerned with the ability to “try on” clothing before
purchases. Therefore, it is very important that retailers accommodate the best they can for these consumers
and provide them with a more interactive shopping experience. This could lead to the digital mirrors in
stores or the VTO technology online that allows consumers to virtually try on their clothing before making
a decision. This can greatly increase the number of sales in stores and significantly increase the number of
sales online. Newer innovation such as integrated apparel technology and 3D printing could greatly
influence the industry but their concept still needs to be tested. Innovators that can consistently keep up
with the trends in the market to provide new products in an industry with a short product life cycle are more
likely to succeed in meeting consumer demands and ultimately becoming more profitable.
3. General Level of Management Capability
1 2 3 4 5 6 7 8 9 10

16

Apparel
Online

Apparel
Retail
Evidence:
 Out 100 of the worlds Top CEOs, 12% are found in the retail Industry.16
 Inditex’s CEO Pablo Isla has been ranked as the third best-performing CEO in the world.17
 Since Karl Johan Persson was appointed as CEO of H&M, H&M has grown to the Second biggest
clothing company in the world and revue has increase by 49%.18,19
 Nike CEO, Mark Parker, has been described as The World’s Most Creative CEO.20
 TJX CEO, Carol Meyrowitz, has been ranked No. 11 on Fortune’s 2015 Most Powerful Women in
business list. 21
 Fast Retailing CEO, Tadashi Yanai, has been featured in the 50 most influential list of Bloomberg
Markets magazine.22
 Nordstrom has high customer service ethos: the power of hiring nice, capable people and empowering
them to use their judgment.23, 24
In order to complete in the highly competitive retail industry firms must have an effective CEO that can
lead their company towards top performance. 25 Forbes describes an effective CEO, as some one who has
established credibility, is highly competent, and must be caring.26 However finding an effective CEO is one
of the biggest changes that every company faces. There are three common methods that most companies
implement when they acquire a new CEO.27 The most popular CEO replacement strategy is poaching a
currently successful CEO from another large corporation.28 Poaching can be a successful technique;
however it is also the most expensive method of hiring a new CEO. The second method is selecting a prior
CEO, someone with experience as head of another large publicly company.29 The final method is promoting
an individual from with in the company and appointing them as CEO.30 Once an effective CEO is hired it is
important to retain talent through stock within the company and a high salary.31
4. Industry Product Life Cycle:
1 2 3 4
Intro Growth Maturity Decline
Evidence:
 According to MarketLine, the annual growth rate of the US retail apparel industry was 4.4%
annually from 2010 to 2014, and it is expected to increase at a declining rate up to 2019.32
 E-commerce is growing rapidly in apparel and is expected to continue growing throughout 2017.
Retail apparel ecommerce sales were 37.6 billion in 2011 and are expected to grow to 75.7 billion
in 2015 and 87.8 billion in 2016. Among all retail online, apparel captures the largest share.33
 Net profit margin for fashion stores are increasing and are currently over 7%, higher than
previous years.34
 Fast fashion is growing the industry and creating trends in the market. These clothing are
distributed quickly and generate sales quickly.35
 Apparel retailers are spending more on advertising as more business is being conducted online
growing the industry via company websites designed to attract consumers. Websites are more
convenient as they allow consumers to view more products, purchase, and have their product
delivered directly to home.36
 Number of retail stores, especially apparel retail stores are decreasing annually.37

17
Monopoly Oligopoly Monopolistic
Competition
Pure
Competition
While a majority of sales occur in stores, we are seeing a decline in the number of stores and an
increase in the number of sales online. More and more consumers every year are searching and
deciding products they should buy online. Retail ecommerce is growing significantly, and retail
apparel is one of the largest retailers online. The growing fast fashion trend is becoming very popular
and forcing apparel retailers to adapt quickly to consumer demands with new and affordable
products. Retail apparel companies will need to grow their marketing campaigns online and create
simple interactive websites for consumers to shop.
5. Industry Concentration Analysis
1 2 3 4 5 6 7 8 9 10
Evidence:
 96.4% of the total market share in the USA is split between Nordstrom, JCPenney, Walmart, Sears,
Macy’s, and Target.38
 The US industry is concentrated: the 50 largest companies account for about two-thirds of industry
revenue.39
 Brand Equity plays an imperative in a crowded marketplace, and with ever-changing customer tastes
new fashion brands have the ability to capture major market share in certain clothing niches.40
 In the fiscal 2014 Zara had sales of $19.7 Million compared to H&M with 20.2 Billion, Fast Retailing
(Uniqlo) $16.6 Billion, Gap 16.4 Billion, Primark $7.5 Billion, Abercrombie & Fitch 3.7 Billion, and
Mango at 2.1 Billion.41
The retail industry is highly concentrated with seven retailer holding 96.4% of the total market share.42
With high concentration it is important to establish a brand to convey your companies quality, status, and
value to the consumer.43

18
Competitive Industry Endnotes
1 "Brands, Technology and the Changing Face of Retail." Theguardian. http://www.theguardian.com/media-
network/media-network-blog/2014/mar/03/brands-technology-changing-f, Accessed October 2015.
network/media-network-blog/2014/mar/03/brands-technology-changing-face-retail, Accessed October 2015.
3 Jackson, Elizabeth. "What Online Apparel Shoppers Want." What Online Apparel Shoppers Want. March 3,
2014. https://www.internetretailer.com/commentary/2015/04/23/what-online-apparel-shoppers-want,. Accessed
October 30, 2015.
October 30, 2015.
October 30, 2015.
October 30, 2015.
October 30, 2015.
8 Azevedo, Susana Garrido, and João Ferreira. 2009. "RFID Technology in Retailing: An Exploratory Study on
Fashion Apparels." ICFAI Journal Of Managerial Economics 7, no. 1: 7-22. Business Source Premier,
EBSCOhost (accessed October 24, 2015).
9 Vaughan, Allyson. 2000. "Wireless Struts The Catwalk." Wireless Week 6, no. 38: 48. Business Source
Premier, EBSCOhost (accessed October 24, 2015).
10 Merle, Aurélie, Sylvain Senecal, and Anik St-Onge. 2012. "Whether and How Virtual Try-On Influences
Consumer Responses to an Apparel Web Site."International Journal Of Electronic Commerce 16, no. 3: 41-
64. Business Source Premier, EBSCOhost (accessed October 24, 2015).
network/media-network-blog/2014/mar/03/brands-technology-changing-face-retail, Accessed October 2015.
12 "New Trends of Mobile Users and Their Shopping Behaviour." Wishpond Simple Marketing Software.
http://corp.wishpond.com/mobile-marketing-resources/new-trends-of-mobile-users-and-their-shopping-
be....Accessed October 30, 2015.
13 "New Trends of Mobile Users and Their Shopping Behaviour." Wishpond Simple Marketing Software.
http://corp.wishpond.com/mobile-marketing-resources/new-trends-of-mobile-users-and-their-shopping-
be....Accessed October 30, 2015.
14 MailOnline, Victoria Woollaston for. "The End of Fitting Room Queues? Smart Mirrors Lets You Virtually
Try on Clothes and Order Drinks." Mail Online. January 12, 2015.
http://www.dailymail.co.uk/sciencetech/article-2906563/The-end-fitting-room-queues-Smart-mirrors-let....
15 Petro, Greg. "The Future Of Fashion Retailing: The Zara Approach." Forbes. October 25, 2012.
http://www.forbes.com/sites/gregpetro/2012/10/25/the-future-of-fashion-retailing-the-zara-approach-
p....Accessed October 30, 2015.
16 "The Best-Performing CEOs in the World." Harvard Business Review. November 01, 2015.
https://hbr.org/2015/11/the-best-performing-ceos-in-the-world, Accessed October 30, 2015.
17"Is Pablo Isla the Best Non-family CEO of a Family Business in the World?" RSS.
http://www.famcap.com/articles/2015/10/15/is-pablo-isla-the-best-non-family-ceo-of-a-family-business....
18 "Karl Johan Persson: H&M CEO - TheIndustryLeaders.net." TheIndustryLeadersNet. June 10, 2013.
http://www.theindustryleaders.net/h-m-ceo-karl-johan-persson/. Accessed October 30, 2015.

19
19 "Karl Johan Persson: H&M CEO - TheIndustryLeaders.net." TheIndustryLeadersNet. June 10, 2013.
http://www.theindustryleaders.net/h-m-ceo-karl-johan-persson/. Accessed October 30, 2015.
20 "How CEO Mark Parker Runs Nike To Keep Pace With Rapid Change." Fast Company. November 05,
2012.http://www.fastcompany.com/3002642/how-ceo-mark-parker-runs-nike-keep-pace-rapid-change,
21 "As T.J. Maxx Parent Surpasses Macy's, CEO Carol Meyrowitz Steps down on a High Note." Fortune As TJ
Maxx Parent Surpasses Macys CEO Carol Meyrowitz Steps down on a High Note Comments. October 07,
2015. http://fortune.com/2015/10/07/tjmaxx-ceo-carol-meyrowitz-resignation-macys/, Accessed October 30,
2015.
22 "Tadashi Yanai Success Story." Tadashi Yanai Story. http://successstory.com/people/tadashi-yanai, Accessed
October 30, 2015.
23 Solomon, Micah. "Take These Two Steps To Rival Nordstrom's Customer Service
Experience."Forbes.http://www.forbes.com/sites/micahsolomon/2014/03/15/the-nordstrom-two-part-customer-
experience-formu.... Accessed October 30, 2015.
24 Lutz, Ashley. "Nordstrom's Simple Strategy For Beating Everyone Else In Retail." Business Insider. October
08, 2014. http://www.businessinsider.com/nordstroms-business-strategy-2014-10. Accessed October 30, 2015.
25 Mller, Andrew. "5 Characteristics Shared by the Most Successful Organizations." Entrepreneur. May 13,
2014. http://www.entrepreneur.com/article/233526, Accessed October 30, 2015.
26 Trammell, Joel. "The Three Qualities a CEO Must Have to Succeed." Forbes. June 10, 2014.
http://www.forbes.com/sites/joeltrammell/2014/06/10/the-three-qualities-a-ceo-must-have-to-
succeed/.Accessed October 30, 2015.
27 "CEO Selection: Common Board Mistakes." CEO Selection: Common Board Mistakes.
https://saylordotorg.github.io/text_corporate-governance/s07-04-ceo-selection-common-board-mis.html.
31 "Top CEO Pay Has Increased by 54% since 2009." RT English. Accessed October 30, 2015.
https://www.rt.com/usa/269776-top-ceo-pay-increase/.
32 "Apparel Retail Industry Profile: United States." Apparel Retail Industry Profile: United States (May 2015):
1-39. Business Source Premier, EBSCOhost (accessed October 25, 2015).
33 "Retail Ecommerce Set to Keep a Strong Pace Through 2017 - EMarketer." Retail Ecommerce Set to Keep a
Strong Pace Through 2017 - EMarketer. April 24, 2013. http://www.emarketer.com/Article/Retail-Ecommerce-
Set-Keep-Strong-Pace-Through-2017/1009836. Accessed October 30, 2015.
34 Biery, Mary Ellen. "Business Has Been More Lucrative For U.S. Clothing Stores." Forbes. May 11, 2014.
http://www.forbes.com/sites/sageworks/2014/05/11/clothing-industry-analysis/. Accessed October 30, 2015.
35 Kaplan, David. "'Fast Fashion' Emerging; Discount Popularity Lives on." San Antonio Express-News. June
12, 2014. http://www.expressnews.com/business/national/article/Fast-fashion-emerging-discount-popularity-
55490.... Accessed October 30, 2015.
36 "The Growing Apparel Market." Global Biz Circle. June 03, 2015. http://globalbizcircle.com/growing-
apparel-market/. Accessed October 30, 2015.
37 Farfan, Barbara. "All 2015 Store Closings - Stores Closed by U.S. Retail Industry Chains." About.com
Money. http://retailindustry.about.com/od/USRetailStoreClosingInfoFAQs/fl/All-2015-Store-Closings-Stores-
Cl.... Accessed October 30, 2015.

20
38 Source: Department Stores in the US, IBISWorld, Accessed October 2015. Page. 24
39 "!industry_name! - Industry Facts and Trends." Clothing Stores. Accessed http://www.hoovers.com/industry-
facts.clothing-stores.1519.html. October 30, 2015.
40 Duff, Victoria. "Important Factors of Competition in the Clothing Market." Small Business.
http://smallbusiness.chron.com/important-factors-competition-clothing-market-81643.html. Accessed October
30, 2015.
41 http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/
42 Source: Department Stores in the US, IBISWorld, Accessed October 2015. Page. 24
43 Duff, Victoria. "Important Factors of Competition in the Clothing Market." Small Business.
http://smallbusiness.chron.com/important-factors-competition-clothing-market-81643.html. Accessed October
30, 2015.

21
Competitor Map Analysis: Retail Apparel Industry
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Key Industry Success Factors Market and Buyer Indications Financial AnalysisCompetitor
MarketCap
(M)
Revenue
*
#Retail
Stores
#Countries
GlobalRank
Numberof
Employee
RankinU.S
Inventory
Turnover
Privateor
Public
Pricing
Level***
Store
Change
%Sales
Outside
US**
Current
Ratio
Net
Income*
ROA%
LTDebt
*
P/ERatio
A Inditex 137,05
4
20,563.22 6,700 88 65,814 137,054 117,579 4.27 Public M 480 85.3 1.9 2,838.2
5
17.1
7
2.265 17.61
a1 Zara N/A 14,800 2,085 88 806 24,000 954 N/A Private M 80 N/A N/A 12,676.
3
N/A N/A N/A
a2 Pull&Bear N/A 681.03 898 65 8,952 3,297 N/A N/A Private M 45 N/A N/A 45.999 N/A N/A N/A
a3 Bershka N/A 911.65 1,006 68 7,005 4,461 N/A N/A Private L 52 N/A N/A (0.138) N/A N/A N/A
Main Competitors
B H&M 11,094 20,419.38 3,700 61 501 11,422M 478 3.46 Public L 400 90 2.11 2,693.8
3
28.2
8
N/A N/A
C Forever21 N/A 4,000.40 723 49 946 35,000 299 N/A Private L 200 N/A N/A 124.00 N/A N/A N/A
D Uniqlo 3,722 13,300.83 1,500 18 1,195 30,448 847 3.5 Public L 5 95 2.62 716.97 7.87 9,129 N/A
E Top Shop N/A 4.298 500 40 4,758 35,000 2,912 N/A Private M N/A N/A N/A 1.958 N/A N/A N/A
U.S Competitors
F Kohl 8,933 19,023.00 1,162 1 415 32,000 75 3.15 Public L 30 0 1.99 867.00 6.04 4,651 45.18
G Nordstrom 12,663
7
13,506.00 316 2 496 67,000 113 5.15 Public H 73 0.1 1.87 720.00 8.1 3,123 67.42
H Express 1,581 2,165.48 641 3 4,886 18,000 1,030 6.63 Public M 41 1.5 2.28 68.33 5.57 199.53 18.80
I J. Crew N/A 2,540.45 404 4 1,729 15,600 426 N/A Private H 20 N/A 2.2 657.77 N/A N/A N/A
J Urban
Outfitters
3,474 3,323.08 401 11 1,841 24,000 573 6.42 Public M 12 25 2.29 232.43 11.3
1
N/A 16.40
J1 Free
People
N/A N/A 102 2 5,545 N/A 1,739 N/A Private H 15 N/A N/A N/A N/A N/A N/A
J2 Anthropol
-ogie
N/A N/A 216 3 2,944 N/A 758 N/A Private H 13 N/A N/A N/A N/A N/A N/A
J3 Bhldn N/A N/A N/A N/
A
19,737 N/A 5,049 N/A Private H N/A N/A N/A N/A N/A N/A N/A
K JCPenney 2,939 12,257.00 1,100 2 780 114,000 166 2.86 Public M (40) N/A 1.93 711.00 6.96 5,360 N/A
L Macy’s 16,979 28,105.00 773 1 380 166,900 76 3.05 Public M 38 0 1.57 1,526.0
0
7.1 7,265 50.46

22
Currency U.S. Dollars * In Million ** Calculate by 1 minus sales in U.S. *** L: Avg < $40, M: Avg < $100, H: Avg > 100.
M Men’s
Wearhous
e
1,880 3,252.55 1,758 2 12,518 18,600 2,856 2.46 Public M 17 15 2.54 (95.00) N/A 1,676 67.03
N Ross Store 20,828 11,041.67 1,200 1 37,733 71,400 8,032 6.04 Public L 90 0 1.36 924.72 21.5
6
398.38 21.45
International Competitors
O Gap 10,832 16,435.00 3,751 51 455 141,000 102 5.32 Public L (175) 23 1.93 1,262.0
0
16.2
9
1,332 26.49
O1 Banana
Republic
N/A 475.00 650 31 12,899 N/A 2,797 N/A Private H 28 N/A N/A N/A N/A N/A N/A
O2 Intermix N/A 150.00 37 1 66,997 N/A 13,620 N/A Private H 7 N/A N/A N/A N/A N/A N/A
O3 Old Navy N/A 1,180 1,022 4,668 N/A 959 N.A Private L 44 N/A N.A N/A N/A N/A N/A
P Michael
Kors
7,791 4,371.47 555 95 7,946 5,378 3,155 3.64 Public H 45 22 6.11 881.02 35.9
9
N/A 41.75
Q Nike 88,033 30,601.00 858 120 553 62,600 331 3.99 Public M N/A 56 2.52 3,273.0
0
16.2
9
1,079 128.7
9
R Kate
Spade
2,263 1,138.60 315 20 6,624 3,500 1,608 2.67 Public H (16) 18.7 1.88 159.16 16.4
5
400.28 20.80
S A&F 1,408 3,744.03 1,049 20 4,659 6,000 1,352 2.89 Public M (180) 50 1.16 51.82 1.94 341.83 20.08
T Wal-Mart 188,83
0
485,651 11,505 28 132 2,200,000 31 8.11 Public L 40,00
0
41 0.97 16,363 8.01 43,692 12.30

23
Competitor Map Endnotes
1
A-T Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
2
A Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
a1 PrivCo, “Zara report”, accessed October 29, 2015.
a2 PrivCo, “Pull&Bear report”, accessed October 29, 2015.
a3 PrivCo, “Bershka report”, accessed October 29, 2015.
B Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
C Ibid.
D Ibid.
E PrivCo, “TopShop report”, accessed October 29, 2015.
F Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
E Ibid.
F Ibid.
G Ibid.
H Ibid.
I PrivCo, “J.Crew report”, accessed October 29, 2015.
J Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
K Ibid.
L Ibid.
M Ibid.
N Ibid.
O Ibid.
O1 Mergent Online, “The Gap- 10K”, accessed October 29, 2015.
O2 Ibid.
O3 Ibid.
P Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
Q Ibid.
R Ibid.
S Ibid.
T Ibid.
3-4
A Inditex Company, “About us” https://www.inditex.com/en/our_group, accessed October 19, 2015.
Mergent Online, “Inditex - 10K”, accessed October 29, 2015.a1

24
a2 Ibid.
a3 Ibid.
B H&M Company, “The H&M Group” http://about.hm.com/en/About/facts-about-hm/about-hm/hm-group.html#cm-menu,
accessed October 19, 2015.
C Forever 21 Company, “About us” http://www.forever21.com/Company/About.aspx?br=f21, accessed October 19, 2015.
D Fast Retailing, Company Introduction, http://www.fastretailing.com/eng/group/strategy/usa.html, accessed October 19, 2015.
E TopShop, About us, http://www.careers.topshop.com/about-us/ , accessed October 23, 2015.
F Kohl Corporation, http://www.kohls.com/sale-event/kohl-s-cares.jsp, accessed October 19, 2015.
G Nordstrom Company, Company History, http://shop.nordstrom.com/c/company-history, accessed October 19, 2015
H Express Company, About us, http://www.express.com/service/custserv.jsp?name=AboutUsMainPage, accessed October 19, 2015
I Vault, “About J.Crew Group, Inc” http://www.vault.com/company-profiles/retail/j-crew-group,-inc/company-overview.aspx，
J Urban outfitters Company, Locator http://www.urbanoutfitters.com/urban/stores, accessed October 23, 2015.
J1 Mergent Online, “Urban outfitters Company - 10K”, accessed October 29, 2015.
J2 Ibid.
J3 Ibid.
K JCPenny Company, Jcpenncy Stores, http://stores.jcpenney.com/, accessed October 19, 2015.
L Macy’s Inc, “Macy’s: A History” https://www.macysinc.com/about-us/macysinc-history/macys-a-history/default.aspx，accessed
October 19, 2015.
M Men’s Wearhouse, “About Men’s Wearhouse”
http://www.menswearhouse.com/ContentAttachmentView?contentName=MW4ABThome.html&catalogId=12004&top=&parent_
category_rn=&categoryId=&langId=-1&storeId=12751, accessed October 23, 2015.
N Ross Store Company, “Who we are” http://corp.rossstores.com/careers/who-we-are, accessed October 23, 2015.
O Cap Inc, About – Key Facts, http://www. inc.com/content/gapinc/html/aboutus/keyfacts.html, accessed October 19, 2015.
O1 Mergent Online, “Gap - 10K”, accessed October 29, 2015.
O2 Ibid.
O3 Ibid.
P Michael Kors Company, Corporate Profile, http://investors.michaelkors.com/corporate-overview/default.aspx, accessed October
19, 2015
Q Statista, Number of Nike’s retail stores in the United States from 2009-2015, http://www.statista.com/statistics/241642/number-
of-nike-stores-in-the-us-since-2008 , accessed October 19, 2015.
R Kapte Spade, the company, https://www.katespade.com/katespade-about-us/katespade-the-company.html, accessed October 19,
2015.
S U.S Securities and Exchange Commission, “Abercrombie& Fitch 10-K”
http://www.sec.gov/Archives/edgar/data/1018840/000101884014000033/anf-20140201x10k.htm, accessed October 19, 2015.
T Wal-Mart, Our Location, http://corporate.walmart.com/our-story/our-locations, accessed October 23, 2015.

25
5
A-T Alexa, “Global Rank” http://www.alexa.com/, accessed October29, 2015.
6
A-T Mergent Online, “Inditex Competitors”, accessed October 16, 2015.
7
A-T Alexa, “Rank in U.S.” http://www.alexa.com/, accessed October29, 2015.
8
A-T Mergent Online, “Company Financial Report”, accessed October 16, 2015.
9
A-T PrivCO, “Private Company Search”, accessed October 16, 2015
10
A http://www.zara.com/, accessed October 19, 2015
a1 http://www.bershka.com/dz/en/ accessed October 29, 2015.
a2 http://www.pullandbear.com/inditex-sel/?redirect=true, accessed October 29, 2015.
a3 http://www.bershka.com/, accessed October 29, 2015.
B http://www.hm.com/ ,accessed October 18, 2015.
C http://www.forever21.com/, accessed October 18, 2015.
D http://www.uniqlo.com/, accessed October 18, 2015.
E http://us.topshop.com/?geoip=home , accessed October 23, 2015.
F http://www.kohls.com , accessed October 18, 2015.
G http://shop.nordstrom.com/ , accessed October 18, 2015.
H http://www.express.com/, accessed October 18, 2015.
I https://www.jcrew.com, accessed October 18, 2015.
J http://www.urbanoutfitters.com/ , accessed October 23, 2015.
J1 http://www.freepeople.com/?cm_mmc=RKG-GoogleUS-_-Google-_-Brand-Brand+General-_-
free_people&adpos=1t1&creative=83956918986&device=c&matchtype=e&network=g&gclid=CjwKEAjwh8exBRDyyqqH9pvf1ncS
JAAu4OE3SzCRJf5e3tyLwfWolzC4odpEm2h5hr9FLM1tRqOBcRoCXl3w_wcB accessed October 29, 2015.
J2 http://www.anthropologie.com/ , accessed October 29, 2015.
J3 http://www.bhldn.com/ ,accessed October 29, 2015.
K http://www.jcpenney.com/, accessed October 18, 2015.
L http://www.macys.com/, accessed October 18, 2015.
M http://www.menswearhouse.com/ , accessed October 23, 2015.
N http://www.rossstores.com/ , accessed October 23, 2015.
O http://www.gap.com/, accessed October 18, 2015.
O1 http://www.bananarepublic.com/browse/home.do?&cvosrc=ppc.google.banana%20republic&cvo_campaign=362614083&cvo_a
dgroup=21454287843&cvo_crid=82883678643&Matchtype=e&campaigntype=brand&tid=brps015990&kwid=1&ap=7&sem=tru

26
e&mkwid=rloelHAE_dc&creative=82883678643&adpos=1t1 ,accessed October 29, 2015.
O2 http://www.intermixonline.com/ ,accessed October 29, 2015.
O3 http://www.oldnavy.com/ ,accessed October 29, 2015.
P http://www.michaelkors.com/, accessed October 18, 2015.
Q http://www.nike.com/, accessed October 18, 2015.
R https://www.katespade.com. accessed October 18, 2015.
S http://www.abercrombie.com/, accessed October 18, 2015.
T http://www.walmart.com/ , accessed October 23, 2015.
11
A Rodrigo Orihuela, “Inditex Sales Growth Hits Two-Year High as More Stores Open”,
http://www.bloomberg.com/news/articles/2015-03-18/inditex-full-year-profit-meets-estimates-on-zara-chain-expansion,
a1 Mergent Online, “Inditex - 10K”, accessed October 29, 2015.
B Eliza Brooke, “H&M IS OPENING 400 STORES THIS YEAR AND LAUNCHING A NEW BEAUTY RANGE”
http://fashionista.com/2015/01/hm-full-year-2014, accessed October 23, 2015.
C Jacqueline Renfrow, “Forever 21 partners with Oracle, announces 600 new stores, http://www.fierceretail.com/story/forever -21-
partners-oracle-announces-600-new-stores/2015-02-03, accessed October 23, 2015.
D Barbara Thau, “Uniqlo's Poor U.S. Performance Marks Second Troubled Attempt At Mall Expansion”,
http://www.forbes.com/sites/barbarathau/2015/10/18/uniqlos-poor-u-s-showing-marks-second-troubled-attempt-at-mall-
expansion/ , accessed October 23, 2015
F Kohl's Department Stores, Inc, “About Kohl's Department Stores, Inc.” http://www.vault.com/company-profiles/retail/kohls-
department-stores,-inc/company-overview.aspx, accessed October 23, 2015.
G Sharon Bailey, “Big plans for Nordstrom Rack stores”, http://marketrealist.com/2015/02/big-plans-nordstrom-rack-stores/ ,
H MARIANNE WILSON, “Express to open 30 outlet stores in 2015; division exceeding expectations”
http://www.chainstoreage.com/article/express-open-30-outlet-stores-2015-division-exceeding-expectations , accessed October
23, 2015.
I Phil Wahba, “J.Crew’s Drexler bets on Madewell, outlets, and overseas to fix business” http://fortune.com/2015/03/19/jcrew-
madewell-outlets-overseas/ , accessed October 23, 2015.
J “Unlike Others, Urban Outfitters Will Continue To Open Stores”
http://www.forbes.com/sites/greatspeculations/2015/02/20/unlike-others-urban-outfitters-will-continue-to-open-stores/ ,
J1 Mergent Online, “Urban outfitters Company - 10K”, accessed October 29, 2015.
J2 Ibid.

27
J3 Ibid.
K Phil Wahba, “Why won’t J.C. Penney close more stores? E-commerce, the next CEO says”
http://fortune.com/2015/06/10/jcpenney-ecommerce-stores/ , accessed October 23, 2015.
L Chris Isidore, “Macy's closing up to 40 more stores” http://money.cnn.com/2015/09/09/news/companies/macys-store-closings/
, accessed October 23, 2015.
M DAN BERTHIAUME, “Men’s Wearhouse to open 300 tuxedo shops in Macy’s”
http://www.chainstoreage.com/article/men%E2%80%99s-wearhouse-open-300-tuxedo-shops-
macy%E2%80%99s?utm_term=CSA159201&utm_source=MagnetMail&utm_medium=subject&utm_term=DayBreaker%3A%20K
ohl%27s%20reveals%20succession%20planning%20as%20it%20names%20top%20merchant%20and%20starts%20COO%20h
unt&utm_content=CSA-NLE-Daily-06%2F12%2F15 , accessed October 23, 2015.
N DAN BERTHIAUME, “Ross opens 27 stores, has bigger plans” http://www.chainstoreage.com/article/ross-opens-27-stores-has-
bigger-plans , accessed October 23, 2015.
O HIROKO TABUCHI, “Gap Is Closing 175 Stores, Hoping for a Turnaround”, http://www.nytimes.com/2015/06/16/business/gap-
to-close-175-stores-in-north-america.html?_r=1 , accessed October 23, 2015
O1 Mergent Online, “The Gap- 10K”, accessed October 29, 2015.
O2 Ibid.
O3 Ibid.
P Nicole Marie Melton, “Michael Kors plans rapid expansion with 45 more North American stores”
http://www.fierceretail.com/story/michael-kors-plans-rapid-expansion-45-more-north-american-stores/2014-05-30, accessed
October 23, 2015.
R ALLISON ENRIGHT, “Kate Spade will shutter some stores and give more attention to e-commerce”
https://www.internetretailer.com/2015/01/29/kate-spade-shutters-stores-and-invests-e-commerce , accessed October 23, 2015.
S “Abercrombie & Fitch Closing 180 Stores By 2015” http://www.huffingtonpost.com/2012/02/15/abercrombie-closing-stores-
2012_n_1280199.html , accessed October 23, 2015.
T “Retailers to open 40,000 U.S. stores in 2015” http://www.icsc.org/sct/newsletters/article/retailers-to-open-40000-u.s.-stores-
in-2015/ , accessed October 23, 2015.
12
A Mergent Online, “Inditex- Annual Report”, accessed October 23, 2015.
B Mergent Online, “Hennes& Mauritz AB- Financial Stmt.” accessed October 23, 2015.
D Mergent Online, “Fast Retailing Co., Ltd – 10k”, accessed October 23, 2015.
F Mergent Online, “Kohl’s Corp – 10k”, accessed October 23, 2015.
G Mergent Online, “Nordstrom, Inc – Annual/ 10K Report”, accessed October 23, 2015.
H Mergent Online, “ Express, Inc – 10K or Int’l Equivalent”, accessed October 23, 2015.
J Mergent Online, “Urban Outfiftters, Inc. – 10k”, accessed October 23, 2015.
K Mergent Online, “Penney (J.C.) Co., Inc. – 10k or Int’l Equivalent”, accessed October 23, 2015.
L Mergent Online, “Macy’s Inc – 10K or Int’l Equlcalent”, accessed October 23, 2015.

28
N Mergent Online, “Ross Store- 10k”, accessed October 23, 2015.
O Mergent Online, “The Gap, Inc – Annual/ 10K Report”, accessed October 23, 2015.
P Mergent Online, “Michael Kros Holdings Ltd. – 10K or Int’l Equivalent”, accessed October 23, 2015.
Q Mergent Online, “Nike Inc- Annual / 10K Report”, accessed October 23, 2015.
R Mergent Online, “ Kate Spade & Co – 10K or Intl Equivalent”, accessed October 23, 2015.
S Mergent Online, “Abercrombie & Fitch – 10k or Int’l Equivalent”, accessed October 23, 2015.
T Mergent Online, “Wal-Mart Store, Inc. –Annual Report”. accessed October 23, 2015.
13
A-T Mergent Online, “Company Financials- Ratio”, accessed October 16, 2015
14
15
16
17
A Mergent Online, “Inditex- Annual Report”, accessed October 29, 2015

29
Strategic Recommendations
Inditex is a public international company that originated in Spain and since then has expanded into the rest
of Europe, Asia, and the Americas. Inditex operates a large supply chain and multiple distribution channels with
eight different subsidiaries located across the world. Their leading subsidiary is Zara, a fashion apparel retail store
that boasts the latest trends in the market. Inditex is known for its vertical integration, high-end apparel, and fast
fashion. They design,produce, and distribute all of their clothing around the world. They have 6000 stores
worldwide and an overwhelming majority of these stores are owned by the corporation.1 Despite its significant
growth since its founding in 1985, Inditex is experiencing a decline in growth and consequently must take action in
order expand and increase profits. While the company is very large, it still succumbs to the demands of the market
and must keep up with trends in the industry to fuel growth. The industry has seen a drastic increase in ecommerce
and new technology that all apparel retailers should exploit.2 The first recommendation that we suggest is for Inditex
should take full advantage of this opportunity to develop their ecommerce and innovate their online services. Second
recommendation is for Inditex to market their product more and advertise on growing platforms such as online and
mobile. The last recommendation is for Inditex to focus on expanding in the Asian and Americas market to gather
more sales and betterbrand awareness.Overall, these recommendations should help Inditex grow their consumer
base and total market share.
Inditex should grow their ecommerce and offer innovative solutions to grow their consumer base.The
number of consumers in ecommerce has been growing significantly over the last few years.3 Due to the
technological advancement and easy accessibility of the internet, many consumers have turned to online retailers for
the large variety of options and the convenience. Inditex owns multiple subsidiaries and manages multiple websites.
They have done a great job developing the product image, but they can do more to create congruency between the
consumer and the product. Inditex should incorporate interactive technology on all of their websites to allow their
consumers to virtually “try on” their apparel.4 Inditex can provide their consumers with these VTO’s to give
consumers a betterimage of themselves wearing the apparel, thus increasing their self-esteem towards the product.
If Inditex can innovate their ecommerce to include new interactive technology,they can attract a majority of the
growing consumers online and ultimately generate more sales.
Not only is there an increase of consumers online, but also on mobile. These two platforms are expected to
grow the fastest in retail over the next few years.5 Currently, there is an almost equivalent proportion of advertising

30
to time spent on each platform. The largest discrepancy lies in mobile, where 24% of consumers who spend their
time on mobile, but only 8% of that period is spend on advertising.6 While a majority of the new generation is using
mobile phones and many older generations are becoming more tech savvy with phones,we will find that Inditex has
a large opportunity to target consumers. Marketing online has also become more effective because of the big data
and targeting technology available to large firms. Big data is becoming essential and necessary for strategic
decisions.7 Inditex should utilize big data in order to create an online and mobile marketing strategy to target
specific demographics that they will find after analysis of their data results.
Inditex can grow their market share and penetrate new markets to attract new consumers by implementing
an aggressive international growth program into Asia and the Americas. According to data found on Inditex’s 10k,
they have only 21% of their business in Asian and other certain countries.8They also have only 14% of their
business in the Americas while a majority of their efforts are focused in Europe, primarily Spain.9 According to
Nation Master,Spain has an estimated population 44,372,000 in 2015 while the United States has 325,723,000,
more than seven times the number that Spain possesses.The United States is wealthiest nation in the world, and
Asia holds the highest population by far.10, 11 In light of these facts, Inditex has a very large opportunity to penetrate
new markets in these countries by leveraging their economic of scales and relying on the strength of their brand.
Overall, Inditex needs to implement a strong marketing strategy to target consumers online and on mobile.
This will grow their brand and attract many consumers that are now spending a large amount of time on digital
media devices. Inditex has other opportunities via ecommerce if they choose to innovate their platform to
incorporate interactive technology.This technology should create a sense ofcongruency between the consumers and
the products enticing them to buy. While providing consumers with a huge selection of product and allowing them
to mix and match the products on a flexible VTO program, Inditex can significantly increase brand perception and
change the way people shop online. Inditex can capitalize on current trends indicating a growing number of
consumers online that is expended to grow even more rapidly with more years to come. In addition to ecommerce
and marketing, Inditex has a very large opportunity in America and Asia. While dominant in Europe, Inditex can
significantly increase market share if they grow their business segments in these countries. The outlook for Inditex is
positive, and if they follow our recommendations, they will achieve nothing short of success.

31
Strategic Recommendations Endnotes
1"Brands." Zara. https://www.inditex.com/brands/zara. Accessed OCTOBER 2015
2 Jackson, Elizabeth. "What Online Apparel Shoppers Want." What Online Apparel Shoppers
Want. April 23, 2015. https://www.internetretailer.com/commentary/2015/04/23/what-
online-apparel-shoppers-want. Accessed October 30, 2015.
3 Jackson, Elizabeth. "What Online Apparel Shoppers Want." What Online Apparel Shoppers
Want. April 23, 2015. https://www.internetretailer.com/commentary/2015/04/23/what-
online-apparel-shoppers-want. Accessed October 30, 2015.
4 Merle, Aurélie, Sylvain Senecal, and Anik St-Onge. 2012. "Whether and How Virtual Try-
On Influences Consumer Responses to an Apparel Web Site."International Journal Of
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44
EXHIBIT A: Key Executive Bios1
Mr.Pablo Isla Alvarez de Tejera1
Chairman and Chief Executive Officer
Mr. Pablo Isla has been the Deputy Chairman and CEO since 2005. He is a graduate in Law from
the Complutense University of Madrid and Abogado del Estado (State lawyer).
From 1992 to 1996 he was Director of Legal Services for Banco Popular. He went on to be
appointed General Director of State Assests at the Ministry of Economy and Finances.
From July 2000 to 2005 he was Chairman of Altadis group. Likewise, he sits on the Board of
Directors of Telefónica, S.A. He was re-elected to the Board of Directors by the AGM held on
13 July 2010 and 14 July 2015. He holds 1,805,320 shares in the company.
Mr. Amancio Ortega Gaona1
Founder of Inditex and Member of the Board
He is the founding shareholder of Inditex. He began his textile manufacturing operations in 1963.
In 1972 he founded Confecciones Goa, S.A., the first garment-making factory of Inditex and
three years later he founded Zara España, S.A. the first distribution and retailing company. He
was re-elected to the Board of Directors by the AGM held on 30 June 1990, 31 July 1995, 20
July 2000, 15 July 2005, 13 July 2010 and 14 July 2015
He is the majority shareholder of the company wherein he owns 1,848,000,315 shares through
Gartler, S.L. and Partler 2006, S.L.
Mr. José Arnau Sierra1
Deputy Chairman
A Law graduate from the University of Santiago de Compostela and State Tax Inspector, Mr
Arnau has been the first executive of Grupo Pontegadea since 2001, a Director at GARTLER,
S.L. since 1997 and member of the Board of Trustees of the Fundación Amancio Ortega Gaona
since 2001. He was the director of Inditex's Tax Department and member of its Steering
Committee from 1993 through 2001 and he also served on the Board of Directors of the
company from 1997 through 2000. Previously, he held different positions in the Tax
administration. He has also been a member of the Board of Directors of Banco Pastor (from 2005
through 2012) and Profesor asociado (part-time instructor) of Tax Law at the University of
Corunna from 1993 through 1996. He was appointed to the Board of directors in June 2012 and
ratified by the AGM held on 17 July 2012. He is the direct holder of 30,000 shares in Inditex´s
share capital.
Mrs. Irene R. Miller1
Member
She has been an independent director since April 2001. She is a graduate of the University of
Toronto with a Bachelor of Science and of Cornell University with a Master of Science in
chemistry. She began her career at General Foods Corporation and later worked as an investment
banker for Rothschild Inc. and Morgan Stanley & Co. In 1991 she joined Barnes & Noble Inc. as
Senior Vice President of Corporate Finance and in 1993, before the flotation of Barnes & Noble,

45
became Chief Financial Officer. In 1995, she was appointed Director and Vice-Chairman of the
Board of Directors of Barnes & Noble. At the present time, she is CEO of Akim, Inc., an
American investment and consulting firm, which she joined in 1997. She is also a member of the
Boards of Directors of Coach Inc. (where she chairs the Audit Committee), and the Toronto-
Dominion Bank Financial Group. Previously, she served on the Board of Directors of Oakley
Inc., Benckiser N.V., The Body Shop International Plc and Barnes & Noble, Inc.
She was appointed to the Board of Directors of Industria de Diseño Textil, S.A. (Inditex, S.A.)
on 20 April 2001 and re-elected during the AGM held on 18 July 2006 and 19 July 2011. She
owns 66,200 shares in the company.
Mr. José Luis Durán Schulz1
Ordinary member
He holds a degree in Economics and Management from ICADE (Instituto Católico de
Administración y Dirección de Empresas). From 1987 through 1990, he was an auditor at Arthur
Andersen. In 1991, he joined Carrefour Group, where he held the following positions: Head of
Management for Spain, Europe and Latin America (1991-1997); Chief Financial Officer for
Spain (1997-2001); Group Chief Financial Officer (2001-2005) and Group Chief Executive
Officer (2005-2008). In July 2009, he joined Maus Frères International Group, based in
Switzerland, where he held the following positions, until January 2015: Chief Executive Officer
of Lacoste, Chairman of Gant AB and Board member of Aigle, S.A. At present, he is an
independent director and member of the Audit Committee of Orange, and an independent
director and member of the Governance and Remuneration Committee of Unibail-Rodamco.
Appointed as director on 14 July 2015.

46
Company Financials
Industria De Diseno Textil (Inditex) SA (NBB: IDEX Y)2
As Reported Annual Balance Sheet
Exchange rate used is that of the Year End reported date
Consolidated 01/31/2015 01/31/2014 01/31/2013
Scale EUR EUR EUR
Total non-current assets
Not
Qualified
Not
Qualified
Not
Qualified
Rights over leased assets Yes Yes Yes
Other intangible assets Thousands Thousands Thousands
Goodwill 8271047 6991300 6198166
Property, plant & equipment, gross 531115 508919 487474
Less accumulated depreciation 152995 133363 125326
Impairment losses 197901 203458 207089
Property, plant & equipment, net 10800418 9467511 8736075
Investment property -4698000 -4253841 -3976921
Investments -61844 -76089 -96747
Total other non-current assets 6040573 5137581 4662407
Deferred tax assets 81490 82809 82567
Total current assets 151253 20634 3992
Total inventories 472146 374871 246757
Trade & other receivables, net 643574 529664 382554
Income tax receivable 7105953 6764961 6692150
Temporary financial investments 1859516 1676879 1581297
Other financial assets 861811 815227 847608
Other current assets 68284 95637 58936
Cash & cash equivalents 222259 212890 260632
Total assets 168947 13022 7831
Net equity 127207 104580 92928
Net equity attributable to the parent 3797930 3846726 3842918
Net equity attributable to non-
controlling interest 15377000 13756261 12890316
Total non-current liabilities 10468701 9278363 8481861
Provisions 10430655 9246244 8445936
Total other non-current liabilities 38046 32119 35925
Financial debt 1159471 1015605 923391
Deferred tax liabilities 200611 147768 144331
Total current liabilities 715771 648414 583100
Financial debt 2265 2133 4306
Other financial liabilities 240825 217291 191654
Income tax payable 3748828 3462293 3485064
Trade & other payables,net 7823 2521 2437
Total equity & liabilities 83222 38339 73918
149905 88981 165428
3507878 3332451 3243281
15377000 13756261 12890316

47
As Reported Annual Income Statement
Report Date 01/31/2015 01/31/2014 01/31/2013
Currency EUR EUR EUR
Audit Status Not
Qualified
Not
Qualified
Not
Qualified
Consolidated Yes Yes Yes
Scale Thousands Thousands Thousands
Revenue 18116534 16724439 15946143
Total cost of merchandise -7547637 -6801507 -6416825
Gross profit 10568897 9922932 9529318
Total operating expenses -6457569 -5998264 -5604783
Operating expenses & income -8256 1302 -11578
Operating profit 4103073 3925971 3912957
Amortization & depreciation -904887 -855090 -796117
Income before finance costs 3198186 3070880 3116840
Net financing revenue (costs) 14483 -18182 14129
Equity accounting losses 32125 - -
Profit before tax 3244794 3052698 3130969
Income tax -734643 -671133 -763956
Net income 2510151 2381565 2367013
Income attributable to non-controlling
interest 9603 4483 6254
Income attributable to the parent 2500548 2377082 2360759
Weighted average shares outstanding 3113773.37 3115562.175 3116652
Year-end shares outstanding 3116652 3116652 3116652
Net earnings per share 0.803 0.763 0.757
Total number of employees 137054 128313 120314

48
As Reported Annual Cash Flow
Report Date 01/31/2015 01/31/2014 01/31/2013
Currency EUR EUR EUR
Audit Status Not Qualified Not Qualified Not
Qualified
Consolidated Yes Yes Yes
Scale Thousands Thousands Thousands
Profit before taxes & non-controlling
interest 3244794 3052698 3130969
Amortization & depreciation 904887 855090 810802
Foreign exchange translation
differences -117039 57591 -14291
Provision for impairment 6119 4659 48714
Share of (profit) loss from equity-
accounted investments -32125 - -
Other adjustments 49824 -125796 97584
Income tax -707232 -895725 -818160
Cash flows generated 3349228 2948517 3255619
Inventories -243904 -142356 -376272
Receivables & other current assets -67349 25374 -289198
Current payables 209531 -4263 528803
Variation in operating financing
requirements -101722 -121245 -136666
Net cash flows from operating activities 3247506 2827272 3118952
Acquisition of intangible assets -166740 -133339 -122362
Acquisition of property, plant &
equipment -1629523 -1117066 -1192590
Proceeds from sale of entities - 10866 -
Payment for investments in other
financial assets 29224 -16642 -
Proceeds from sale of assets &
collections of othernon-current assets -81553 -142095 -23908
Changes in temporary financial
investments 1455 47335 -260632
Net cash flows from investing activities -1847136 -1350942 -1599492
Variation in non-current financial
borrowing - - 3913
Variation in non-current non-financial
borrowing 1653 - -
Purchase of treasury shares -26861 -46494 -
Variation in current financial borrowing 6418 -1150 750
Dividends -1510371 -1377724 -1129769
Net cash flows from financing activities -1529161 -1425368 -1125105
Net increase (decrease) in cash & cash
equivalents -128791 50962 394355
Cash & cash equivalents at beginning
of year 3846726 3842918 3466752
Effect of exchange rate fluctuations on
cash & cash equivalents held 79995 -47154 -18190
Cash & cash equivalents at end of year 3797930 3846726 3842918

49
Company Bios and Financials Endnotes
1 Source: Inditex Executives, via Mergent, accessed October 2015
2 Source: Inditex Company financials, via Mergent, accessed October 2015

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