Zara’s owner insists it can stay youthful into middle age as the world’s biggest fashion brand reaches half a century in business grappling with slowing sales growth, trade battles and all-out wars.
Despite market doubts that have knocked almost €40bn off its market capitalisation since December, Óscar García Maceiras, Inditex chief executive, told the Financial Times the company could keep growing through Zara’s “selective” approach to store expansion.
“We’ve never gone for the dynamic of announcing plans to triple the number of shops in X number of years or to double the balance sheet,” he said. “It’s project by project.”
Last year, Zara entered Uzbekistan, its 97th country, and next year it will open a store in North Carolina, its 26th US state. García Maceiras, who took over in 2022, said there was even room to increase sales in Spain — its most mature market — by replacing smaller, dated Zara stores with flashier, bigger outlets nearby.
Inditex’s chief also identified virgin territory for the smaller brands the group acquired or set up in the 1990s — such as Massimo Dutti, Bershka and Pull&Bear — but had rolled out only recently in some major markets.
The fashion industry, however, is going through a tough time. Fragile consumer confidence is being shaken by trade wars and armed conflicts, exacerbating pressures from the longer-term trend of consumers spending more on experiences and less on clothing.
Inditex led the sector’s revival from the pandemic but its sales growth has dwindled since, falling to 1.5 per cent in the first quarter of 2025 — although currency fluctuations worked against it.
García Maceiras said: “At certain times, or during specific campaigns, growth may be faster, and at other times growth might be somewhat more moderate. But we remain extremely confident that the capabilities of our teams and our model will keep working and that we will continue to see a positive evolution.”
The chief executive is a methodical, impassive character who is not an obvious fit for the world of fashion. Indeed, before joining Inditex he worked his way up the corporate ladder of Spanish banks, including a stint as general counsel at Santander.
García Maceiras, who turns 50 himself in October, declared that he and Zara “are both from the 1975 harvest”, referring to the year Inditex’s billionaire founder Amancio Ortega opened the first Zara store in A Coruña, north-west Spain. Ortega’s daughter Marta is now Inditex’s chair.
Spain is still Inditex’s largest market with just over 1,000 stores, accounting for 15 per cent of sales. The US is in second place by revenue, despite Inditex operating only 100 stores in the country. Russia was its number-two market until the company sold its business there due to the Ukraine war.
Zara’s success has been built on the speed of its supply chain. It sources almost half of its goods from so-called proximity countries, mainly Spain, Portugal, Turkey and Morocco.
That is coupled with a “forensic” ability to ascertain and process what consumers like in terms of colours, fabric and style, said Richard Hyman, partner at Aria Intelligent Solutions, a retail advisory group.
All told, that means Inditex can design new catwalk-inspired outfits and get them into shops in as little as three weeks. Everything has to pass through its distribution centres in Spain, or one in the Netherlands, but García Maceiras said they kept store line-ups fresh by replenishing them with new shipments twice a week.
Inditex’s model has helped the group prosper despite strong competition from the likes of Mango, Primark and Shein. The group’s net profit grew 9 per cent to €5.9bn last year.
Even though Inditex has reduced its store count by 2,000 to 5,500 outlets since 2019, its total store space has increased because it closes smaller shops and consolidates into fewer, larger ones. Those stores also generate significantly higher sales per square foot. Since 2021, roughly one-quarter of its sales have been made online.
“As Inditex enters middle age, is it past it? Absolutely not,” said Hyman. “I think it’s maturing nicely. But at 50 it gets hard to produce the same growth numbers you did years and years ago.”
On top of that, today’s fashion market is challenging for even the best operators. “When demand is soft . . . you get an easing of innovation because . . . people are trying to protect their trading numbers,” Hyman said. “Is Inditex as innovative today as it was five years ago? Maybe not. Is the market similarly less innovative? Yes.”
García Maceiras said a prevailing sense of economic turbulence could discourage consumers from major purchases “like buying a house or changing their car”. But he said shoppers remained willing to buy party dresses and beach blouses as long as one key indicator — the unemployment rate — was not rising.
Since the pandemic, he said, it had been “very stable in most of our markets”.
García Maceiras was also sanguine about the impact of the global trade war sparked by US President Donald Trump’s tariff barrage, mainly because of its sourcing from Turkey and Morocco, which are threatened with lower tariffs than the likes of China, Vietnam and Bangladesh.
His argument for why investors should keep the faith on sales was that fashion retail had been so fragmented even a giant like Inditex had a low market share, affording it room to keep growing.
For example, Oysho, an Inditex-owned chain that has shifted from lingerie to leisurewear, entered the UK in only 2023, while Bershka, which aims to be more edgy and youthful, opened its first store in India this year.
But Simon Irwin, retail analyst at Tanyard Advisory, questioned whether Inditex’s smaller chains had sufficiently strong identities. “Everyone knows what Zara is. But Bershka, Stradivarius, Pull&Bear — are they really all that different?”
Zara remains the group’s driving force. García Maceiras enthused about the sleek interiors and cafés being introduced in the chain’s newest shops.
Irwin said Zara’s store upgrades had given it an “enormous uplift” in sales per square metre.
“But the issue is you can’t keep playing that game forever. Sales densities have a natural peak whoever you are,” he said. “At some point to grow the business you either need to start growing online, or increase your store numbers.”
This is no midlife crisis for Inditex. But to avoid stagnation a new impetus would not go amiss.
