Zara Franchise in the UK

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zara franchise

Originally posted on 05/01/2019. Updated on 05/06/2019.

As one of the biggest fashion brands in the world, Zara is a would-be franchisee’s dream investment. With around 7,475 stores already in operation, the brand benefits from excellent exposure and access to some of the world’s most lucrative markets. Here, we take a look at how the company grew to become a high street favourite and whether it offers franchising opportunities.

What is Zara?

Zara is a Spanish fashion retailer that has successfully developed a significant international presence and is considered a leading high street brand, both in the UK and abroad. It is part of the Inditex group, which also owns Massimo Dutti, Bershka and Stradivarius. Inditex operates in 202 markets and has a combined workforce of over 170,000 people. As a result, it is the largest clothing retail group in the world. Zara is considered its most prestigious brand.

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Zara has earned a positive reputation for its ability to keep up with the latest trends and is associated with the fast fashion revolution. The fast fashion movement is typified by the use of modern manufacturing processes and supply chain logistics to ensure that new trends come to the market in a remarkably short time period. Zara appears to have perfected this process and now takes just one week to design a new product and get it into stores.

This approach allows Zara to bring approximately 12,000 new products and 20 clothing collections to consumers every year. It has also made it one of the world’s most influential fashion brands and a popular choice among consumers who appreciate its constantly evolving, on-trend selection.

A Brief History of the Brand

Zara was founded in 1975 by Amancio Ortega and Rosalía Mera and began life as a single store in the heart of A Coruña, Galicia. The business aimed initially to sell affordable products based on high-end fashion by utilising innovative manufacturing techniques. Using A Coruña as its base of operations was a decision that held symbolic importance, as the area was once renowned for its textile industry.

During the 1980s, Ortega and Mera worked to refine the design and manufacturing processes that allowed them to get their products to market as quickly as possible. The idea was to create “instant fashions” that were responsive to the latest trends and that would change as quickly as consumers’ tastes did. By the end of the decade, this goal had largely been achieved and the company began considering international expansion.

Zara’s first store outside of Spain opened in Porto, Portugal, in 1988. A year later, the brand made the jump across the Atlantic and, in 1990, opened its first store in France. This was to be a decade of significant growth as the brand expanded at a rapid rate, with a new market opening every year. Central America, Central Europe, Asia and the Middle East all got Zara stores in the 1990s. The first in the UK opened in 1998.

Since then, Zara has focused on pioneering new technologies for greater efficiency in its supply chain and store management. The business also has a “no advertising” policy, preferring to spend the money it would put aside for marketing on opening new stores and facilitating further expansion.

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Who’s in charge at Zara?

Zara’s parent company, the Inditex Group, is still owned and operated by Amancio Ortega. Ortega is the wealthiest individual in Spain and the most prosperous retailer in the world. His £50 billion fortune makes him the second wealthiest person in Europe and the fifth wealthiest in the world. Despite this, he is thought to enjoy a relatively simple lifestyle and be slightly reclusive. Ortega has only given three interviews to the media and very few photographs of him have ever been published.

How has Zara performed financially?

In 2017, Zara generated approximately £22 billion in revenue, which mean it was ranked on Forbes’ “most valuable brands list” that year. In the UK, it earned £600 million in the same year, despite substantial investment in store refurbishments and moving their UK headquarters.

However, although these figures indicate financial success, the brand has a relatively small market share in the UK, particularly when compared to key competitors. For instance, market leader Marks & Spencer boasts a market share of 9 percent, while Zara is only able to achieve a market share of 1.5 percent. This suggests that there is room for the brand to grow further in the UK.

Is Zara a franchise?

In the past, Zara has offered franchising opportunities to large organisations that it feels have the capital and capabilities to maintain the brand’s high standards and introduce the business to a new market. For instance, in Singapore, Zara franchises are owned by the Al-Futtaim Group from Dubai, which also owns the rights to Ikea franchises in many Middle Eastern nations.

However, the business has started to buy back stores from its franchisees, bringing them under the control of central management. In 2006, it bought out its franchisees in Russia. This was followed by agreements with franchisees in Kazakhstan in 2011 and franchisees in Finland in 2013.

Zara Franchise UK

There are currently no franchised Zara stores in the UK and there does not appear to be any plans to offer franchising opportunities in the future. The brand seems to be moving away from the Zara franchise model and attempting to acquire back franchises in the vast majority of European markets. Presumably, as Inditex is the largest retail group in the world, its management team does not consider it necessary to offer franchising opportunities to facilitate further expansion.

What does the future hold for Zara?

Although e-commerce operations are challenging the future of many high street fashion chains, Zara is in a good position to survive – and thrive. Its design, manufacturing and distribution processes have made it a market leader and should ensure that it maintains significant advantages over any business that tries to take its place.

Alternative Franchise Investment Opportunities

The good news is that there are other options if you are determined to open a fashion franchise. Take a look at Noa Noa, which is currently in the Point Franchise directory; it could offer job satisfaction and profitability in one.

Noa Noa

Noa Noa provides a very different offering to Zara in terms of its products, manufacturing techniques and values. While Zara prides itself on its ability to provide consumers with the very latest trends by getting new clothing and accessories into stores just a week after they are designed, Noa Noa prioritises a ‘slow craft’. This means that it uses both modern and traditional Danish design techniques in its own workshops to create products that are high in quality and will last for years to come. Instead of tracking fashion trends, Noa Noa focusses on classic pieces that will always be in style. What’s more, it has recently increased its product returns period from eight days to a month in order to give customers longer to decide whether an item is for them. This should give items that might otherwise have been thrown in landfill a new lease of life with a different customer.

As a result of its manufacturing techniques and environmental awareness, Noa Noa caters to the increasing number of consumers who care about the sustainability of their fashion decisions and the impact they have on the environment. As more and more people turn away from fast fashion retailers in search of pieces that will stand the test of time, Noa Noa should be a lucrative business to get involved in.

Noa Noa aims its products at the ‘modern bohemian woman’ and puts nature at the forefront of everything it does. The company gives precedence to natural fabrics such as wool, silk and organic cotton in its clothing and makes sure not to overlook the details. This means customers often discover fabric-covered buttons, hand-sewn hems and “lining worth showing” on Noa Noa products. Its name means “simple and harmonious” in Tahitian, and these are standards that the brand values highly.

Because of its dedication to its craft, Noa Noa is a fantastic opportunity for entrepreneurs who want to become part of a reputable and environmentally sustainable brand. It was first launched in 1981 by two brothers, Harold and Lars Holstein and, since then, has expanded internationally through its successful franchise model. Today, the Noa Noa brand can be found in more than 60 concept stores and over 400 department stores in 20 countries.

To get involved, prospective franchisees will need to be prepared to invest between £50,000 and £100,000 and sign a five-year contract that can be renewed at the end of the contract period. In return, all franchisees are enrolled onto an initial franchising scheme which will put them in touch with an experienced visual merchandiser to help design the store and provide support in staff training, procurement and marketing.

To find out more, visit Noa Noa’s profile page.

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