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Sanjay Bakshi analyses Zara’s performance since its last review and evaluates the brand’s posturing amid the onslaught of a rare pandemic.

A heavily-detailed and extensively-researched feature on Zara was published in the November 2019 edition of Fibre2Fashion. It introduced Zara’s inspiring historical evolution as an iconic fashion brand, its business model, unrivalled global status and secrets behind brand’s enviable success. Zara’s global as well as local performance up to 2018 was reviewed while talking about its journey in India.

The brand Zara is now being reviewed again, but this time under the shadow of the covid-19 pandemic that has disrupted economies the world over, halted fashion consumption and wreaked havoc on the retail industry. This feature attempts to analyse how the fashion group performed in 2019—the successive fiscal, as also what it did during the lockdown and the subsequent unlocking times. Since the pandemic situation has been unprecedented, all decisions and their impact need to be understood at the company’s level rather than at Zara alone. Inditex SA, Zara’s parent company, made some bold and innovative decisions to sail through the prevailing circumstances

The eve of pandemic
The FY2019 proved to be good for the Inditex group, fetching €28,286 million in revenue against €26,145 million in 2018. The year registered an 8.2 per cent annual growth against 3.2 per cent growth in 2018. The revenue share in key markets also saw a visible shift where the native Spain market lost significant share to other markets. The share of the Spanish market in the group’s total revenue dropped from 16.2 per cent in 2018 to 15.7 per cent in 2019; the rest of Europe market’s share rose from 45.1 per cent to 46 per cent; American markets also had a marginal rise of 0.3 per cent when it moved to 15.8 per cent from 15.5 per cent share; and, rest of the markets’ share including Asia dropped from 23.2 per cent to 22.5 per cent.