Much noise has been made in the media this week about Spanish fast-fashion chain Zara overtaking US casualwear giant Gap as the world’s largest fashion retailer.
Quite why this is hitting the headlines now, months after the two posted the first quarter figures on which the comparison has been made, I’m not sure, but I would imagine that it has been prompted by the downbeat statements released by Gap this week.
To recap, in quarter one of its financial year Gap posted global sales down 10% at ¤2.17 billion (£1.71bn), while Zara’s were up 9% at £1.75bn. In the meantime, however, Gap has since revealed its second quarter figures which show global sales up on quarter one but down 5% year-on-year at £1.8bn.
Without yet knowing how Zara fared in the second quarter, we can’t say whether it is still true that it is ahead, but it is fair to say that the Inditex-owned business has done a much better job of globalising its offer in recent years than Gap, whose international sales are still on the slide (like-for-likes were down 6% in the second quarter).
At the heart of Zara’s success is its strategy to let store managers act as buyers since they’re closest to their customer. The nearest Gap got to this was to establish a European design team to cater for the continent’s differing tastes and sizes, but this initiative has just been axed.
It is not entirely fair to compare the two retailers, not just because the figures are old but because they are in very different parts of the market; Zara in fast fashion and Gap in the torrid middle market. But the US giant could still learn a thing or two from Zara’s think global, act local approach to fashion.