Exclusive: Zara owner Ortega shields Inditex stake to maintain family control

Thu Apr 6, 2017 9:04am EDT
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By Sonya Dowsett

MADRID (Reuters) - Amancio Ortega, founder of the world's biggest clothing retailer Inditex and Europe's richest man, has put a majority stake in the firm that owns the Zara fashion chain into a holding company to ensure family control remains unassailable after he dies.

Corporate filings in Spain's Mercantile Registry show the reclusive 81-year-old put a 50.01 percent shareholding into Pontegadea Investments in December 2015, along with more than 6 billion euros ($6.5 billion) in prime commercial real estate.

Ortega's heirs will now inherit stakes in Pontegadea, which groups assets worth around 57 billion euros, rather than Inditex shares which potentially could be sold, muddying prospects for the company's direction.

"The absolute priority for Ortega is to guarantee the future of the company, to ensure a controlling stake in Inditex that will not be diluted," a source close to Pontegadea told Reuters when asked about the reasoning behind the structure.

The move aims to preserve continuity in ownership and management, said the source, who asked not to be named because of the sensitive nature of the issue.

It also is likely to maintain the firm's paternalistic presence in the northwestern region of Galicia, where Ortega lives.

A former errand boy, Ortega built his empire in the mid-1970s from a Zara store in his hometown, the rainy fishing port of La Coruna, to a network of over 7,200 stores that employs tens of thousands globally.

His success has had a huge knock-on effect on local businesses in Galicia, from Trison, which makes video displays for Zara stores, to Candido Hermida, a furniture maker which fits out Inditex stores worldwide.   Continued...

Torre Picasso, a 45-floor office building and first Inditex founder Amancio Ortega's first large-scale foray into the real estate market in 2011, is seen in Madrid, Spain. REUTERS/Juan Medina