Zara A Retailer's Dream

While its rivals start planning their lines on average nine months before they hit the shelves, Zara has a reputation for instant reaction to fashion trends and rapid restocking of stores to meet demand on items that are hits. It's also not afraid to pull items from shelves and cancel ones that aren't selling. Zara can make a new line, from the initial concept to when it arrives in the shops, in just three weeks.

But how did this once-tiny lingerie company, based in the small northern Spanish town La Coruna, grow to become one of the biggest -- and most successful -- players in its game? The secret, according to CEO Jose Castellano, is its reliance on communication, and the way it uses existing technology to take that owns Zara, is still located on the outskirts of La Coruna in the Galicia region.

Its design-and-manufacturing headquarters is a sprawling industrial complex with a vast network of underground tunnels lined with conveyor belts that transport clothing from one part of the complex to another. Almost all of Zara's clothes are made here, right from the basic fabric dying stage. "Technology in this company is important and will be more important in the future," says Castellano. The technology we use is mainly information technology and the communication between the shop managers and the design team here in the headquarters."

Designers are in daily contact with store managers, discussing which items are most in demand and which aren't. This, supported by real-time sales data, allows the designers to action repeat orders and create fresh designs, and from La Coruna they are shipped directly to the stores, eliminating the need for expensive warehouses. Zara lines rarely stay on the shelves for more than a month.

And, according to Marie Claire editor Marie O'Riordan, the formula works. "With other high-street retailers, the risk is buying something that you'll bump into somebody wearing the same thing, and it spoils the effect," she says. "With Zara, because the stock turnover is so fast, you have to get there on day one. It tends to sell out two days later so you have a real chance of being a little bit exclusive, which is quite unusual for a high street."