MADRID (Reuters) - Spain’s Amancio Ortega, elevated by Forbes to become the third richest person in the world, may have discovered fashion’s secret of eternal youth.
The “fast fashion” tycoon’s estimated net worth of $57 billion is built on a formula of endless renewal, with dresses and blouses displayed in thousands of Zara stores worldwide for only a few days before they are taken off the rails and replaced with an even newer line of must-have garments.
Customers know they have to buy the clothes quickly if they want them because they will not be available for long. The now-global strategy also encourages shoppers to return frequently to see new ranges and trends.
In a country with sky-high unemployment and businesses going to the wall, Spain’s richest man is a rare self-made mogul amid a corporate culture dominated by family dynasties.
Ortega overtook U.S. investor Warren Buffett and luxury group chief Bernard Arnault of France to become the third richest person on Forbes’ 2013 annual ranking of billionaires on Monday. Ahead of Ortega are Mexican telecoms boss Carlos Slim at No.1, followed by Microsoft co-founder Bill Gates.
The aggressively managed Inditex has more than 6,000 stores in some 90 countries and includes such brands as Ortega’s flagship Zara, Zara Home, Massimo Dutti and others. It is the world’s biggest fashion retailer ahead of Gap and Hennes & Mauritz, making 840 million garments a year.
Inditex says it does not advertise, and with celebrities such as Kate Middleton - wife to Britain’s Prince William - wearing Zara clothes, it may not have to.
Ortega’s empire is a cash-rich business with a market capitalization of 65 billion euros ($84 billion) that is thriving amid the deep economic gloom that is engulfing its home country. The shares rose 67 percent last year, bucking a slump in consumer spending in Spain.
Ortega, a stocky 76-year-old who favors blue blazers, open-necked white shirts and casual trousers, took home 666 million euros in gross dividends thanks to his 59 percent stake in Inditex, which is worth 38 billion euros at current prices.
He has also largely defied the gloom in Spain’s property sector through clever purchases and management of real estate. His Zara stores are often positioned in premium locations near other more luxurious brands as part of his marketing strategy.
Yet surprisingly little is known about Ortega, despite the best efforts of Spain’s intrusive celebrity press.
He has guarded his privacy so jealously that the company has only released one photograph of him, when the company listed in 2001. The nation’s most successful entrepreneur routinely turns down interviews.
“To Amancio Ortega: he didn’t open any doors, nor did he close any windows,” wrote one biographer in a dedication.
According to the Spanish press, Ortega lives in a comfortable but not lavish apartment with his second wife, Flora.
His daughter Marta is widely expected to take over the fashion empire one day and has undergone training at Inditex, including working in a store, although the firm won’t confirm she will be the successor.
Ortega became Spain’s richest man when Inditex listed on the stock exchange but he did not attend the inaugural ringing of the bell at the bourse and never goes to shareholder meetings.
“Reclusive”, “secretive” or “reserved” are the usual descriptions for Ortega, a man occasionally seen at equestrian competitions with his family, who manages to maintain his privacy partly thanks to living in the rainy city of A Coruna in northwest Spain, 300 miles from the capital.
Biographers who say they have had access to him tell a rags-to-riches story: Ortega left school when he was 12 to work as a shirt-maker’s delivery boy, to help support his poor family.
He learnt fast and began making gowns and lingerie in his living room along with his first wife, Rosalia Mera.
He realized customers wanted affordable versions of catwalk trends and opened his first Zara shop in A Coruna in 1975. Over the years, he has added more labels to the business, from teen brand Bershka to the more upmarket Massimo Dutti.
Experts credit Zara with transforming the business through “fast fashion”. Affordable imitations of catwalk designs can move from drawing-board to stores within two weeks -- and poor sellers are pulled off the shop floor even quicker.
Ortega handed over chairmanship of the company to Pablo Isla in 2011 but is thought to retain an active role in the business, where security is tight at its headquarters.
Visitors are picked up from A Coruna in chauffeur-driven cars and taken to the company’s campus a 20-minute drive away, at Arteixo in the middle of the countryside. The complex sprawls across an area equivalent to 11 soccer pitches.
Reuters was attentively shown around by members of the company’s communications team, but it is the firm’s policy to talk more about the company than its founder, and there are scant biographical details in the few books about him.
Ortega does, however, talk to the workers when he visits the A Coruna headquarters.
There are bright, modern, open-plan floors where designers sit close to teams who talk directly to representatives in the firm’s stores, feeding back customers’ reactions to the clothes.
The slickest part of the operation is found at the logistics depot, where computer-controlled overhead conveyer belts drop clothes stitched by suppliers into boxes to be sent out to shops around the globe.
The highlight of the visit, though, is to “Fashion Street”, a mall within the complex that includes a Zara store and another from the furnishings brand Zara Home.
Here every window dressing and table layout is meticulously trialed and photographed, so that stores can replicate the most eye-catching displays from Madrid to Tokyo, from London to Sao Paulo, an example of the tight control practiced by the company.
“The till works but you can’t buy anything here,” explained an Inditex spokesman in the Zara Home store, showing Reuters around its tables of artfully arranged scented candles, folded napkins, towels and racks of bed linen.
Beyond retail, Ortega has investments in two main funds: Pontegadea Inversiones, in which he is the majority owner with 97.2 percent and his daughter Marta has 2.8 percent; and Pontegadea Inmobiliaria. ($1 = 0.7702 euros)
Additional reporting by Tracy Rucinski, Jose Elias Rodriguez and Tomas Cobos; Editing by Giles Elgood