THE ZARA ZILLIONAIREZ
You’ve never heard of him. But the railway worker’s son who created the world’s most successful fashion chain is Europe’s richest man, worth £58billion. One question: will his racy daughter win the battle to inherit his empire?
The house is so unprepossessing it might be mistaken for an office block. The back door opens onto an alleyway with a tattoo parlour. The drawing room overlooks an industrial port where container ships unload cargo.
This is La Coruna, at the north-western-most tip of Spain, but imagine a tenement beside hull docks and you wouldn’t be far wrong.
On fine evenings — few and far between in these parts — its owner, a squat, bald man of 80, customarily emerges to walk his chihuahua along the prom, stopping to chat with neigh- bours or sip coffee in the nearby square. he wears practical clothes: a pale shirt, slacks and an overcoat. Just another Galician pensioner enjoying a pre-dinner stroll. Yet sharp observ- ers might notice the stony-faced, muscular types who stand at a discreet distance.
For despite his appearance, Amancio Ortega is an extraordinary man. Though he left school at 13, he went on to found Zara, the world’s most successful fashion chain. he is now worth an astonishing £58 billion.
Last week, Ortega ( who also owns London’s most valuable property portfolio) saw his wealth increase by £1.1 billion — the dividend on his 59 per cent stake in Inditex, the parent company of Zara and other high Street names such as Pull & Bear and Massimo Dutti. It makes him the richest man in europe by some distance. A few months ago, he briefly surpassed Microsoft’s Bill Gates, investor Warren Buffet and Amazon’s Jeff Bezos as the wealthiest man on earth.
With Inditex’s phenomenal surge predicted to continue, the Zara zillionaire will doubtless regain his mantle.
So who is this humble clothier and how has he outstripped the dot-com giants — in the process re-inventing remote, drizzly La Coruna (a city of 240,000, previously known for fish and aluminium) into an unlikely style capital, as important as Paris or Milan?
how has he revolutionised the high Street with ‘affordable chic’ adored by women from Madrid to Manchester, Buenos Aires to Beijing, but also worn by the Duchess of Cambridge, Samantha Cameron and their ilk?
SInCe its ageing protagonist won’t be around for ever, despite daily walks and gym sessions, there is also the question of who might succeed him. Which brings us to his glamorous younger daughter, Marta, and her racy circle of friends.
The tale begins in 1936, when Ortega was born into a Spain torn by bloody civil war. his father was a railwayman sent to build a line in La Coruna, where the family settled in a track- side hovel that shook when trains passed.
They were desperately poor, and Ortega told his biographer that the ‘ humiliation’ of seeing the grocer refuse to extend credit to his mother was a defining experience. Determined to contribute, he promptly left school to work for a shirt-maker.
he was 13. Such was his diligence and charm, however, that within four years he was headhunted to manage a bigger clothes store.
There, he met pretty shop assistant Rosalia Merla, who would become his first wife and help him build the business.
By the Sixties, Ortega’s horizons extended far beyond managing one boutique. At 26, he rented a backstreet lock-up and set up his first clothes manufacturer with Rosalia and his brother Antonio.
Given the miserable Galician weather and the lack of heating in most houses, an early masterstroke was to produce stylish but cosy, quilted dressing-gowns, which he sold by the hundred.
Yet his real ingenuity was in recognising the advantages of controlling every aspect of the business. Other companies either made clothes, distributed them as agents or sold them. Ortega did it all: there were to be no middle-men, a dictum which still holds today.
Within a decade, he employed 500 staff and was selling throughout Spain. Choosing prime locations for his shops was another essential part of the formula, and in 1975 he opened the first Zara, still standing on a busy corner in the centre of La Coruna. Today, the chain needn’t advertise. But in those early days he did anything for attention.
‘he even put a live cockerel in the window,’ Rosalia’s biographer, Xabier Blanco, told me.
Tapping into Galicia’s great unused resource — its skilled female embroiderers and seamstresses — was another of Ortega’s winning ideas.
During the early eighties, these women still eked out a few pesetas sewing for friends and neighbours. he persuaded them to work exclusively for him, promising large, regular orders and good piece-rates.
As business boomed, he recruited an army of cottage seamstresses — a flexible, talented, local labour force that meant he could make and distribute new clothes quickly in response to demand.
It undoubtedly boosted the regional economy and, to some of those workers, Ortega is a hero. however, others say he exploited them — among them, Maria Grana.
In 1998, the company enlisted her to seam and hem large quantities of trousers, she says, and as the work flowed in she took out a £90,000 loan for bigger premises and new
machines. She also hired 25 staff. ‘For six years, everything was great, and I did very well,’ Maria, now 62, says.
‘Then, suddenly, they started making impossible demands. They would say they needed 150 pairs of trousers by the following day, and ordered me to switch to skirts and dresses, which required different machines. I didn’t have them, so the work dried up.’
Senora Grana says this happened to scores more women, and she now believes it was a cost- cutting ploy to farm their work out to Morocco, where staff were reportedly paid just €108 a month — five times less than the going rate in Galicia.
Garana complained to the local paper, whereupon she claims she was ostracised by the company: ‘I felt completely deceived. My staff had to go on the dole, but at least I avoided bankruptcy, unlike others.’
In response yesterday, Inditex said it had contributed €2.5 billion (£2.16 billion) to the local economy in 2014 and helped create around 32,000 jobs in Galicia. These days there are few complaints about the company. Thanks to Zara’s record performance, its 160,000 staff will share £535 million in bonuses next year.
Some 6,000 are based at its HQ, a huge, granite-walled fortress in Arteixo, on the outskirts of La Coruna, at the heart of which stands a blue-glass nerve-centre resembling a giant Rubik’s Cube. It is connected to the warehouse and other buildings via a labyrinth of tunnels. Veteran
retail analyst Richard Chamberlain says it is ‘ the most impressive business operation I have visited in 35 years’. He likens it to a ‘ fashion university’ where a multi-national assortment of staff design new outfits, made with dizzying speed and consumer-tested in a subterranean mock shopping mall before going out to the stores.
But the key to Zara’s success starts with thousands of store managers, who constantly report sales trends and customer comments to ‘the bunker’, as the HQ is known. As Inditex has such a quick, adaptable production system, it can restock shelves with popular items weeks quicker than lumbering competitors.
Ortega, who still works a ninehour day and eats in the staff canteen, has made more money than he can possibly spend. His concessions to luxury include a country estate, a relatively modest, 100ft yacht, and a private jet ( to assuage his life- long hatred of flying).
However, his personal life has run less smoothly. His marriage to Rosalia brought two children, Sandra, now 48, and Marcos, 45. He had hoped his son would be his heir, and was devastated when Marcos was born with cerebral palsy.
He responded by throwing himself even more intensely into his work. Rosalia reacted very differently, doing voluntary work with cerebral palsy sufferers and setting up a philanthropic foundation. Biographer Blanco says they then drifted apart, and Ortega started a relationship with Flora Perez, an attractive young member of staff. When his wife learned of the affair, Flora was sent to manage the Zara in Vigo, 110 miles from La Coruna. But Ortega would visit her there and, after he and Rosalia divorced, Flora became his second wife. Their daughter, Marta, was born in January 1984 and she became the apple of her father’s eye, while her halfsister gravitated towards her mother. The two daughters had very different upbringings. Sandra attended state school, but Marta finished her education at a Swiss boarding school, where she learned to ride and ski. Marta then studied business management in London, and trained as an assistant in Zara on Oxford Street (where Kate Moss, who modelled there, reportedly rebuffed her friendly overtures). This led to inevitable speculation that she was being groomed to take over the company. Perhaps with that in mind, the obsessively private Ortega — who reluctantly allowed his photograph to be released for the first time in 2001, when Inditex was floated on the stock exchange — strove to keep Marta out of the spotlight. After all, Sandra has maintained her anonymity, despite becoming Spain’s richest woman in 2013, when her mother died and she inherited her seven per cent stake in the company. Indeed, even the local newspapers didn’t know who she was at Rosalia’s funeral. However, by dint of her film-star looks, her friendship with jet-setters such as Athena Onassis and a penchant for show-jumping, Marta is a magnet for the Spanish papers. Then there is her romantic life. In 2012, after dating several eligible men, she married top rider Sergio Alvarez Moya. The ceremony, at her father’s estate, befitted a billionaire’s daughter. The altar was designed by sculptor Anish Kapoor, 20 make-up artists were flown in from new York, and Marta’s gown was created not by Zara, but her couturier friend, narciso Rodriguez. Marta and Alvarez have a fouryear-old son. But last summer the Spanish newspapers said Marta was involved with handsome designer’s son Carlos Torretta. Further eyebrows were raised when a photo of Marta, topless with her back to the camera, was posted on Instagram. It was taken in Barbados on a shoot for Zara Woman, where she has a senior role. Among Ortega watchers, all this cemented a view that began forming several years ago, when he entrusted the day-to-day running of Inditex to former cigarette company boss Pablo Isla: that Marta probably won’t succeed him, much as he dotes on her. But, for now, the octogenarian who made glamour accessible to a generation seems content to keep working, and walking his dog along La Coruna’s bleak promenade.