A sprint after a long-distance race: Inditex takes off in US after 30 years

Cooking at low temperature and heating it up: that was the recipe of the largest fashion group in the world in the largest market for the sector. In 2019, Inditex celebrates 34 years since it established in the United States, a market that, despite being the largest in the world, has always been cautiously trying out. However, in the last two years, the fashion distribution giant has stepped on the gas, with more stores, more chains, and the conquest of new regions.

Today, the group will open a new Zara store in Hudson Yards, “the most important development in New York over recent years,” as Pablo Isla, president of Inditex, explained in the latest presentation of results.

The new point of sale is the icing on the cake after three years of intense work to expand the business in the United States, especially compared to the historic development of the group in the country. Inditex entered the US market in 1989, when Zara was only a chain that wanted to make a firm declaration of intent with a flagship store in New York, which at that time was considered the center of the world.

In 2012, when Inditex had just snatched from Gap the gold of the fashion distribution, the group used again the big apple as a communication tool, with a much anticipated flagship store on the Fifth Avenue that was, according to articles published at that time, closer to Armani than to Gap.

That new declaration of intent that, coincidence or not, ended up boosting the group’s shares above one hundred euros per share. Later that year, Massimo Dutti established in the country with an opening located on a corner of the same street.

And that was it. While competitors such as H&M were making inroads through stores in the country, Inditex barely exceeded 50 and of only two chains: Zara and Massimo Dutti. No big flagships, no penetration strategy.

However, suddenly, everything accelerated. Only in the last five years, Inditex has opened 47 stores in the country, twice as many as it had opened in the previous six years, and has taken two new chains after thirty years operating with only three: Zara, Massimo Dutti and Zara Home, which only distributes online.

In May 2017, the group launched the Bershka online platform for the US market, and at the end of the year it opened an ephemeral store in New York that finally has not closed.

The company has also growth in states such as Michigan, Ohio and California, where until then had a little presence. In 2018, a new offensive was set into motion. In full reorganization of its network of stores, Inditex accelerated its expansion with eleven openings.

Accordingly, the country was positioned as the second market by openings, only behind Mexico. With this sprint, the group exceeded one hundred stores in the United States, and opened up the access to a new chain, Pull&Bear, which for the time being only operates through its online platform.

Overall, Inditex closed 2018 with a global revenue of 26.14 million euros, 3% more than in the previous year. At constant exchange rates, group sales increased by 7%. The net result stood at 3.44 billion euros, 2% more.