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Zara rations sales in Venezuelan stores

Spanish clothing giant Inditex, which owns Zara, has restricted customer purchases to five items per month in its stores in Venezuela as it struggles with a massive upswing in demand.

Published: 17 November 2014 10:11 CET

Zara rations sales in Venezuelan stores

Queues formed to snap up bargains at Zara stores in Venezuela in recent months but there is disagreement on the reason for the new low prices. Photo: Leo Ramírez/AFP

The multinational clothing company owned by Amancio Ortega, Spain's richest man, has introduced the restrictions in response to massive queues at its stores in the South American country after it introduced new, low-cost ranges.

Read Amancio Ortega's rags-to-riches life story in The Local's special profile

An "avalanche" of clients has descended on the shops in recent weeks according to Spanish daily 20 Minutos, causing crowd problems.

Months of chronic stock shortages were followed by the arrival of new ranges of cheap clothes, triggering a surge in demand, but different media sources gave different reasons for Inditex's cut-price offers.

Colombian newspaper La Republica claimed that a favourable exchange rate had allowed Inditex to offer bargains but Spain's El Mundo reported that Venezuela's government had ordered the company to slash prices by 50 per cent.

Venezuelans will now be limited to five items per month: three for the upper body, such as shirts or jackets, and two skirts or pairs of trousers.

Zara clients will be issued individual ID numbers to track their purchases.

Inditex owns Zara, Bershka, Massimo Duti, Pull & Bear and other famous high-street fashion names.

Despite its track record of massive success, Zara was forced to apologize and pull a line of children's clothing from the shelves earlier this year when opponents claimed it resembled Nazi concentration camp uniforms.

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Amancio Ortega's daughter to take over as Zara and Inditex boss

Photo taken in 2016 shows the founder and chairman of the Inditex fashion group Amancio Ortega (R) with his daughter Marta Ortega. Photo: MIGUEL RIOPA / AFP

She will replace Pablo Isla, who has been chairman since 2011, in April, the company said in a statement. He was deputy chairman between 2005 and 2011.

Ortega, 37, has been working for the company in different areas for the last 15 years, even working anonymously as a shop employee at one point to learn the ins and outs of the company.

She is the youngest daughter of Amancio Ortega, 85, who founded fast-fashion giant Zara with his ex-wife Rosalia in 1975 in Spain’s northwestern region of Galicia.

He remains the firm’s largest shareholder with a 59 percent stake and is one of the world’s richest men.

“I have lived and breathed this company since my childhood, and I have learned from all the great professionals I have worked with over the last 15 years,” Marta Ortega said in the statement.

“I have always said that I would dedicate my life to building upon my parents’ legacy, looking to the future but learning from the past,” she added.

Inditex, which operates nearly 7,000 stores worldwide, posted a net profit of almost 1.3 billion euros ($1.5 billion) during its first half of 2021, which runs between February and July.

The fashion group owns seven other brands in addition to Zara, including upmarket Massimo Dutti and teen label Stradivarius.

It is the world’s biggest fashion retailer, ahead of Swedish rival H&M.

Stocking shelves

Inditex thanked Isla, who is resigning, for his “leadership and vision” during his 17 years at the firm, saying the group had become “the leading company in its sector worldwide” under his watch.

It also hailed Marta Ortega, saying she “has led the strengthening of Zara’s brand image and fashion proposition, an area she will continue to oversee.”

She studied international business in London and carried out months-long stays in the departments of finance, accounting, sales analysis and design when she began working at Inditex.

Marta Ortega also briefly worked as an anonymous employee at the group’s shops in 2007, reportedly stocking shelves, to get a better understanding of how they operate.

Oscar Garcia Maceiras, who had become the company’s general counsel and secretary of the board in March, will become CEO “effective immediately”, Inditex said.

Her will replace Carlos Crespo, who took the post two years ago. Crespo will remain chief operating officer.

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