Amancio Ortega: Founder of Zara and Richest Person in Spain

Amancio Ortega is the founding chair of retail giant Inditex, the parent company of Zara, the largest global fashion retailer. He is the wealthiest person in Spain and among the wealthiest people in the world. Ortega built his retail empire as a pioneer of fast fashion—a retail concept based on the rapid production and distribution of inexpensive versions of designs copied from fashion runways or pop culture icons.

Key Takeaways

  • Amancio Ortega, the wealthiest person in Spain and one of the wealthiest people in the world, is the founding chair of retail giant Inditex, the parent company of Zara, the largest global fashion retailer.
  • Ortega built a retail empire as a pioneer of fast fashion—a retail concept based on the rapid production and distribution of inexpensive versions of designs copied from fashion runways or pop culture icons.
  • In 1963, Ortega founded the company that grew into Inditex as a small family workshop in his home in Spain.
  • In 2001, when Inditex was listed on the Madrid Stock Exchange with a valuation of €9 billion, Ortega became a billionaire.
  • Ortega also has vast real estate holdings around the world.
Amancio Ortega

Investopedia / Lara Antal

Education and Early Career

Amancio Ortega Gaona was born in a small village in northern Spain in 1936, at the start of the Spanish Civil War, and moved with his family to Galicia, a region in northwestern Spain, in 1949. His father was an itinerant railway worker, his mother worked as a maid, and the family lived in a row house on the railroad tracks.

According to the only authorized biography of Ortega, his lifelong drive for success was triggered by a traumatic incident that happened shortly after the family arrived in their new town. One evening, as he was walking home with his mother, he witnessed her pleading for credit to buy groceries and coming out of the store empty-handed because the store owner refused. At that moment, Ortega was so humiliated that he decided he would drop out of school and start working—a decision that turned out to be the first step in one of the greatest retail careers in history.

In 1949, at the age of 13, Ortega went to work as an assistant to a luxury shirtmaker in his hometown of La Coruña, where he learned to make clothes by hand. Over the next 14 years, he was promoted to assistant manager and shop manager, gaining direct experience not only in dealing with customers but also in purchasing fabrics and other supplies to manufacture apparel.

The Principles of Fast Fashion

By the early 1960s, Ortega had already developed the core operating principles for the business model that would later be called fast fashion. Rather than do what his boss and every other retailer did—purchase inventory and hope that customers would buy it—Ortega knew that he would make more money if he could learn exactly what people wanted, produce copies of those designs as quickly as possible using much cheaper materials, and sell them at much lower prices.

After getting permission from his employer to produce his own designs, Ortega, his future wife (Rosalia Mera), and his three siblings set up a workshop in their home to sew quilted bathrobes and lingerie based on designer brands and then sell them at budget prices to retailers. After that first brainstorm, Ortega never veered from the two core principles—customer preference and speed—that enabled him to build Inditex.

After launching their first company, Confecciones GOA (his initials reversed), in 1963, Ortega and Rosalia Mera spent the next decade expanding their client base and building their production capacity. Within 10 years, their business had grown so rapidly that GOA had 500 employees. A key driver of GOA's growth throughout these early years was that Ortega eliminated middlemen and controlled manufacturing and the supply chain by organizing thousands of women into sewing cooperatives and trucking in textiles from Barcelona.

From Manufacturing to Retail: The First Zara Store (1975)

By 1975, Ortega and his wife were ready to step up to the next level: direct sales to customers. The first Zara boutique, one of the most successful retail formats in history, opened that year in La Coruña and was a huge hit from the start.

Over the next 10 years, Ortega took the business through a rapid series of expansion milestones. In 1977, company headquarters and Zara's first garment factories were established on the outskirts of La Coruña. By 1983, there were nine Zara stores in shopping districts across cities in Spain; in 1984, the company's first logistics center opened in that same central hub outside La Coruña. In 1985, as Ortega was preparing to launch the Zara brand internationally, Inditex was officially incorporated as the parent company for Zara. The first Zara store outside of Spain opened in Portugal in 1988, followed quickly by New York (1989); Paris (1990); Mexico City (1992); Athens (1993); Belgium and Sweden (1994); Malta (1995); Cypriot (1996); Norway and Israel (1997).

In 1991, in addition to geographic expansion, Ortega began to expand Inditex's retail portfolio beyond the flagship Zara format, with the launch of Pull&Bear, an urban fashion chain, and the acquisition of 65% of Massimo Dutti, then a men's fashion brand. (It acquired the remaining 35% in 1994 and soon added a women's line.) In 1998, Ortega introduced Bershka, another entirely new retail format targeting the young female market.

IPO on Madrid Stock Exchange (2001)

At the turn of the 21st century, as Ortega approached retirement, he decided that taking his family-owned business public was the best path forward. When Inditex listed on the Madrid Stock Exchange at a valuation of €9 billion—one of the most successful initial public offerings (IPOs) of 2001—Ortega's sale of over 20% of his stake made him the wealthiest man in Spain, with a fortune estimated at over €4.6 billion.

Over the next decade, as chair, CEO, and majority shareholder of the new public company, Ortega pursued an aggressive retail expansion and acquisition program, adding new formats and new chains at such a rapid pace that Inditex doubled its store count between 1999 and 2004 alone. Highlights included the 1999 acquisition of Stradivarius (a youth fashion chain), the 2001 launch of Oysho (lingerie), and the 2003 launch of Zara Home (home furnishings)—the company's first business line outside of the apparel industry.

Inditex had a market capitalization of €123.64 billion, or about $133 billlion, as of mid-February 2024.

Computerized Design and Distribution System

In the early 1980s, Ortega was one of the first fashion retailers to implement a computerized design and distribution system—and this system overcame his biggest hurdle: the traditional production processes of the clothing industry, which took up to six months from the design stage to retail delivery. Other manufacturers, stuck in the old model, could never respond quickly to emerging trends, which often left retailers saddled with unsold inventory.

By freeing Inditex from those six-month lead times, which would have limited collection launches to two or three a year, Ortega's computerized system not only shortened the design-to-distribution process to a maximum of two weeks but also enabled Inditex's in-house team of designers to respond immediately to any shift in consumer taste.

Fast fashion—the massively successful business model that Ortega had first developed in the 1960s—was off and running.

In addition to state-of-the-art design and production, the computerized inventory systems that linked stores to factories prevented unnecessary capital expenditure by removing the need for large warehouse inventories. For example, once each Zara store was linked to the factory system, not only was all sales information automatically sent back to headquarters in Spain, but the on-site staff also constantly monitored the stock. If any style or color failed to sell, production was halted immediately. If a style or color was selling well, new colors or patterns were added to existing designs.

The Ortega Business Model

Ortega's business model for Inditex has been so successful for so long that fashion insiders, from competitors to industry analysts, study his strategies carefully. The Economist quoted a Gap executive who said, "I would love to organize our business like Inditex, but I would have to knock the company down and rebuild it from scratch." An executive from Benetton—a competitor that poaches Inditex executives—was quoted as saying, "My main task…is to replicate Inditex's obsessive focus on its products and its shop."

According to The Wall Street Journal, one obvious explanation is simply that "while (a luxury item) from Chanel might be $8,550, one with similar vim from Zara sells for around $120." The newspaper noted that "a luxury-world counterpart, such as Giorgio Armani,…had…consolidated net revenue of $1.9 billion in 2020…(while) Zara's consolidated net revenue was $16.7 billion."

Studies of Zara's "famously well-honed system" frequently cite certain key operational drivers of Ortega's success: stock rotation, minimal advertising, and a short supply chain.

Complete Stock Rotation Every 2 Weeks

The fact that Ortega's fast-fashion model requires that the retail stock be completely rotated every two weeks not only encourages customers to make quick purchase decisions (because any item that catches their eye won't be around for long), but it also prompts them to visit the stores frequently—some devotees coming every two weeks on delivery day.

Minimal Advertising

In addition to industry-leading design-to-store turnaround speed, another strategy of Ortega's that sets Inditex apart from competitors is its minuscule advertising spending.

The reason Inditex stores like Zara can succeed in such a highly competitive industry with minimal advertising is baked into Ortega's original fast-fashion business model: manufacture only what will sell and maintain low stock inventory so that everything sells and nothing needs to be discounted.

Also, since Zara is fast with styles—but not first—almost identical styles have already been widely advertised by the original designer that Zara copied. (Zara's advertising spend is 0.3%; most retailers like the Gap and H&M spend 3.5%.)

Short Supply Chain

Even when Zara began to expand internationally in the 1990s, Ortega kept most of the production local, which gave the company ownership of a short supply chain—another secret of Inditex's exceptionally rapid design-production-delivery turnaround time. In 2022, 49% of the factories supplying Inditex were still located fairly close to corporate headquarters, either in Spain or Portugal, Turkey, or Morocco.

In the fast-fashion model that Ortega built, Inditex spends more initially to keep production close to home, but its short supply chain means that the entire design-production-delivery team can keep their fingers on the pulse of emerging trends and produce only what will sell. Rather than cutting costs by outsourcing to China and waiting months for delivery like their competitors, Inditex drives profit by selling at full price and rarely getting stuck with unwanted stock.

Real Estate Investment Arm: Pontegadea Inmobiliaria

When Inditex went public in 2001, Ortega established a family office, Pontegadea Inversiones, as the vehicle through which the Ortega family operates as majority shareholders of Inditex. The family office, in turn, channels most investments through Ortega's real estate investment arm, Pontegadea Inmobiliaria, one of the biggest property companies in Spain.

Since stepping down from an active operating role at Inditex, Ortega has focused on preserving his fortune by expanding his real estate holdings, which Bloomberg valued at €15.2 billion ($17.2 billion) in 2020—the largest real estate portfolio among European billionaires.

Landmark properties in Ortega's portfolio now span the world, including one of tallest skyscrapers in Spain (the Torre Picasso in Madrid), the historic Haughwout Building in Manhattan, an entire block of prime property in Miami Beach, and an office block in London's Mayfair neighborhood.

Of note, Ortega's commercial real estate holdings make him landlord to several impressive tenants: tech giants Amazon and Facebook as well as Inditex competitors H&M and the Gap.

What Celebrities Wear Zara Clothes?

The most famous Zara fan is likely Kate Middleton, the Duchess of Cambridge, but Zara has a long list of celebrity admirers, including Bella Hadid, Kendall Jenner, and Olivia Palermo.

What Is the Secret of Ortega's Business Model?

A former Inditex executive said that the genius of Ortega's business model is that "it picks up on every season's trends and is never associated with any one style, which could fall out of fashion."

Why Isn't Amancio Ortega More Famous?

Ortega protects his privacy so fiercely that, when he made his first public appearance in 2000, in advance of the Inditex IPO, the fact made headlines in the Spanish financial press. Until 1999, no photograph of Ortega had ever been published—and he has granted very few interviews to journalists over his entire career.

What Is Ortega's Net Worth?

As of February 18, 2024, Ortega had a net worth of $85.3 billion, making him the 15th richest person in the world, according to the Bloomberg Billionaires Index.

What Are Ortega's Charitable Causes?

In 2001, Ortega founded the Amancio Ortega Foundation, a charitable organization focused on education and social welfare. Donations have included $344 million to Spanish public hospitals to fund technology for breast cancer screening and treatment (2017) and €20 million to Cáritas, an international Roman Catholic charity, to provide food, medicine, housing, and school supplies to Spain's neediest people (2012).

The Bottom Line

Amancio Ortega developed the business model that would later be called fast fashion, revolutionizing the retail fashion industry and becoming one of the world's richest men in the process. With his wealth, he has also built one of the world's most valuable real estate portfolios.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Bloomberg. "Bloomberg Billionaires Index."

  2. Fortune. "Meet Amancio Ortega: The Third-Richest Man in the World."

  3. Funding Universe. "Industria de Diseño Textil S.A. History."

  4. Google Finance. "Industria De Diseno Textil Inditex ADR."

  5. The Telegraph. "Rosalia Mera."

  6. The Economist. "Fashion Forward."

  7. The Wall Street Journal. "Why Marta Ortega Pérez Is the Secret to Zara's Success."

  8. Medium. "How ZARA Survives With Minimal Advertising."

  9. Inditex Annual Report 2022. "Suppliers."

  10. Bloomberg. "Zara Founder Unveils $17.2 Billion Global Real Estate Empire."

  11. Business of Fashion. “Zara Owner Ortega Buys $550 Million Madrid Skyscraper.”

  12. Fortune. "With $17.2 Billion in Real Estate Holdings, Zara Founder's Empire Extends Far Beyond Clothing."

  13. Elle. "Stylish Celebrities Who Love Zara Even More Than You."

  14. WhoWhatWear. "The Best Celebrity Zara Looks of All Time."

  15. Famous Entrepreneurs. "Amancio Ortega."

  16. Fundación Amancio Ortega. "Institution."

  17. Think Spain. “Amancio Ortega Foundation Donates 20 Million Euros to Charity.”

Open a New Bank Account
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Sponsor
Name
Description