Ortega beating Buffett as Zara fashions $53.6bn fortune


Inside Inditex SA's concrete-and-glass headquarters in the Spanish town of Arteixo, a lithe woman slips into a dress that a seamstress working amid buzzing sewing machines stitched together just minutes earlier. A half circle of designers — looking like models themselves — nod approval.

In weeks, this and hundreds of other creations inspired by pop culture or couture catwalks will fill the company's more than 1,600 Zara stores in 85 countries on six continents. Since opening the first shop in his seaside home of La Coruna, Spain in 1975, billionaire founder Amancio Ortega has built the world's largest clothing retailer — and a fortune exceeding Warren Buffett's.

Ortega, 76, a publicity-shy entrepreneur with a net worth of $53.6 billion as of Oct. 5, is hardly a celebrity like Buffett or Bill Gates. He occupies the No. 3 spot on Bloomberg Markets' first annual ranking of the world's richest people, behind Microsoft's co-founder. Ortega owns 59 percent of Inditex stock — and those shares surged 58 percent this year through Oct. 5, knocking Buffett, with a net worth of $48.4 billion, to fourth. Mexico's Carlos Slim tops Bloomberg Markets magazine's ranking, with $77.5 billion.

Ortega's wealth is soaring even as his country battles an economic meltdown. Spain's unemployment is hovering around 25 percent as the country suffers its second recession since 2009 and a debt crisis roils Europe. With the global economy growing the slowest in three years, Ortega's cost-conscious lines are ringing up sales.

"That turbulence strangely favors a retailer like Zara," says Nancy Koehn, a retail historian at Harvard Business School. "Among fashionistas, there's a new badge of status in finding the cool at a lower price." Kate Middleton, the Duchess of Cambridge, is sometimes photographed wearing Zara.

Inditex, short for Textile Design Industries in Spanish, boosted revenue to 7.2 billion euros ($9.3 billion) in the first half of 2012, 17 percent more than a year earlier. Revenue in Spain remained stable at about 1.6 billion euros during that time.

"They are very flexible with their product and they are growing nicely," says Peter Braendle, who helps oversee $55 billion, including Inditex shares, at Swisscanto Asset Management in Zurich.

Ortega's Buffett-beating billions haven't changed him, people who work with the fashion mogul say.

After stepping down as Inditex chairman last year, he still travels a half-hour to headquarters most days from La Coruna, where residents speak the local Galician language. He usually settles at a table amid the designers, fabric experts and buyers for the Zara Woman line.

Wearing a simple shirt and slacks rarely of his own brands, which are cut for slimmer men, he confers on everything from placement of a zipper to the September debut of Zara's Chinese website.

"He's extremely close to the business operation, where he meets and sees and talks to everyone," says Antonio Camunas, a former president of the Spain-U.S. Chamber of Commerce who has advised Ortega for almost two decades. Ortega declined to grant an interview for this story.

Ortega turned the top-down fashion industry on its head by responding to customers' demands, says Covadonga O'Shea, president of the University of Navarra's ISEM Fashion Business School in Madrid. "He saw that fashion has to be accessible, not just for a small elite," says O'Shea, who describes Ortega as humble, eager for her opinion and trusting of young talent. "Fashion had to be democratized."

Ortega doesn't have qualms about borrowing from haute brands. In 2008, French footwear maker Christian Louboutin Sarl unsuccessfully sued Inditex, saying the company had infringed on its trademark red-soled high heels. A typical Zara shoe costs less than $100; Louboutin's can exceed $1,000.

Inditex employs 300 designers in Arteixo and 100 in Barcelona, a base for smaller brands such as Massimo Dutti. They churn out 20,000 new items a year, taking cues from daily Inditex store reports on what's selling, what's hanging on racks and what customers are trying on and rejecting. The designers draw up patterns, and in the Arteixo factories, robotic cutters slice miles of fabric to their specifications.

Seamstresses in nearby cooperatives assemble the pieces and send them back for ironing. A machine tags the price, applies plastic wrap and slots each item for delivery.

The son of a railway worker, young Amancio got his start as an errand boy for a clothing shop after dropping out of school at about age 13. He later joined his brother, Antonio, and sister Josefa as salespeople at a competing store. There, he met Rosalia Mera, his first wife. In 1963, the siblings went into business producing inexpensive versions of matelasse bathrobes. Rosalia, Josefa and Antonio's wife, Primitiva, stitched the first quilted items by hand.

Ortega began his global push in 1968 after visiting a Paris clothing fair with Javier Canas Caramelo, an early partner. Ortega opened the first Zara in 1975. By 1990, he had built a Zara in every Spanish city of at least 100,000 people and expanded to Paris and New York. He took his first vacation only after Inditex's initial public offering in 2001, Camunas says.

Ortega's personal life grew turbulent. Mera had given birth to a daughter, Sandra, now 44 and with a $1.1 billion fortune as of Oct. 5. A son, Marcos, was born mentally disabled, which O'Shea calls one of Ortega's great sorrows.

In 1983, Ortega fathered another daughter, Marta, with an Inditex employee. After divorcing Ortega, Mera remains Inditex's second-largest shareholder, with a fortune of $5.2 billion. The employee, Flora Perez Marcote, became Ortega's second wife two decades later. Of his three children, only Marta, who's approaching 30, works at Inditex, as a buyer for the Zara Woman line alongside her father in Arteixo. After starting as a salesperson, she may take the reins one day from the world's third-richest person, O'Shea says.

Despite Ortega's great wealth, Canas doesn't see much difference in the man he got to know in the 1960s. "His mindset, his character, I see him exactly the same as always," Canas says. "He's not out there telling the world, 'I'm No. 3.'"

Start your day with The Independent, sign up for daily news emails
general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
Have you tried new the Independent Digital Edition apps?
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Recruitment Consultant / Account Manager - Surrey / SW London

£40000 per annum + realistic targets: Ashdown Group: A thriving recruitment co...

Ashdown Group: Part-time Payroll Officer - Yorkshire - Professional Services

£25000 per annum: Ashdown Group: A successful professional services firm is lo...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before