Dynasties are everywhere, from the Arnault family who run luxury giant LVMH to the Murdoch-esque siblings seen on Succession.
Inditex – the biggest fashion company in the world and owner of Bershka, Massimo Dutti, Pull&Bear and Stradivarius as well as its best-known Zara brand – is home to another.
Founded in 1975 by Spain’s richest man, Amancio Ortega, his daughter Marta Ortega Perez officially took over as chairman a little over a year ago.
Since then, she has set about proving her doubters wrong.
Now 39, she was long tipped for the top job despite being dismissed by some as little more than a showjumping socialite and billionaire heiress to the Zara fashion empire.
Taking the reins: Marta Ortega Perez officially took over as Inditex chairman a little over a year ago. Since then, she has set about proving her doubters wrong
Her 2018 wedding to modelling agent Carlos Torretta – which included a blush couture gown hand-delivered by Valentino’s designer via private jet and a performance from Coldplay’s Chris Martin at the first dance – was splashed in newspapers across the world.
But while succession battles elsewhere may have pitted siblings against each other as they jostled for power – such as at the fictional Roy media empire in the HBO TV show – for the Ortega family it was seemingly painless.
Speaking back in 2008, Amancio Ortega, now 87, described his ‘peace of mind’ that the family had ‘managed to make it to the second generation almost without anybody noticing’.
‘The problem of succession is settled, because everything has been delegated,’ he revealed.
Just over a year ago, Marta Ortega took up the job as Inditex chairman, 11 years after her father handed the reins to company veteran Pablo Isla, alongside a new chief executive.
Fast-forward a year and she is making her mark. A rare sit-down interview, with the Financial Times, sparked controversy in industry circles as Marta Ortega dismissed the notion Inditex was a ‘fast-fashion’ firm.
But, as critics pointed out, the term – used to slam retailers for poor environmental and worker practices – comes from a 1989 interview in The New York Times with a Zara boss.
‘The latest trend is what we’re after. It takes 15 days between a new idea and getting it into the stores,’ said Juan Lopez, who was tasked with breaking America for Zara at the time.
Although Zara churns out up to 24 collections a year, Marta Ortega has been quick to shut down association of her firm with the term.
She said: ‘We don’t recognise ourselves in what they call fast fashion. Because that brings to mind the amount of unsold items and poor-quality clothes focused on a very cheap price, and that cannot be further from what we do.’
Father: Spain’s richest man Amancio Ortega Gaona founded Inditex in 1975
But sustainability experts said her attempts to distance the brand come across as somewhat hollow. Professor Natascha Radclyffe-Thomas, an expert in sustainable business at the British School of Fashion, said Zara’s trend-following model ‘paved the way’ for contemporary rivals such as Chinese e-commerce giant Shein to launch their own ultra-fast production lines.
While Inditex are ‘certainly not leading lights’ on sustainability, Radclyffe-Thomas said Zara ‘has always associated themselves with a more luxury feel, even if not a luxury price’, rather than tat that is worn once and thrown away.
But even so, although consumers may feel like the purchases are more of an investment, ‘we do know customers don’t tend to associate fast fashion brands with longevity’, she said.
While rivals in the same price range as Inditex have garnered a reputation for cheap, unloved outfits, Inditex has always aimed to be seen as emulating luxury. This seems to be the secret to its success.
Online rivals have struggled to retain fashion fans in the cost of living crisis, many of whom turned to internet shopping sprees in lockdown.
But in its latest results, for the three months to the end of February, Inditex posted upbeat sales and last year profits were up 20 per cent £7.5billion.
Its biggest rival H&M, which is the second largest fashion retailer beyond Inditex, posted less positive results in its own most recent update to the market.
In a downturn, shoppers are looking to get more bang for their buck, while some who would splash out on luxury brands are trading down to High Street alternatives.
So, a year in, analysts are upbeat about Marta Ortega’s chartering of the retailer. A report by the Royal Bank of Canada lauded the firm for having ‘the strongest and most consistent track record of market share gains from specialists, independents and department stores’.
But analysts admit that ‘management transition and ESG concerns have weighed on Inditex’s share price in recent years’.
Still, industry experts are hopeful of a re-rating opportunity if the firm can ‘deliver a consistent high single-digit trend in sales and earnings growth’.
Wizz Selvey, retail analyst and former buyer for Selfridges, said Marta Ortega was ‘steering the ship in the right direction’.
Many would relish an opportunity to call her a ‘nepo baby’ but Selvey believes that her stint on the shop floor in Zara and Bershka stores in London during her university days ‘can only have deepened her understanding of the business and its audience’.
If Marta Ortega makes one thing clear in her introduction to Inditex’s recently published annual report, it’s that the business is on board with sustainability efforts too.
‘We don’t want to be fast; we want to be agile and flexible. We don’t want to be big, we want to be relevant,’ she says, adding that the group ‘want to be agents of change’ in the sector.
It’s a noble ambition on the surface – but sceptics might need more convincing, regardless of Inditex’s bottom line.
