Tuesday, 8 July 2025
Monday, 7 July 2025
Sunday, 6 July 2025
Saturday, 5 July 2025
ZARA 50TH ANNIVERSARY
Zara at
50: how the brand rose to the top – and what it’s doing to stay there
As fashion
empire hits middle age, it’s cutting costs and closing stores, shifting to
larger outlets and new products
Sarah Butler
Sat 5 Jul
2025 10.00 CEST
In Arteixo,
northern Spain, workers are putting the final touches to a gigantic white box
of a building, fixing windows and planting greenery in the new global
headquarters of the fashion brand Zara, which turned 50 this year.
The site,
complete with a private high street where the retailer will test out its latest
store concepts, is not far from the small store on the corner of a nondescript
street in the centre of nearby La Coruña where, in 1975, Amancio Ortega opened
his first fashion store.
From those
humble beginnings grew Inditex, a fashion empire that today boasts seven brands
including Zara, Massimo Dutti, Bershka, Pull & Bear and Oysho. It has more
than 5,500 stores in 98 countries and an online presence in 116 more – from the
US and UK to Zimbabwe and Uzbekistan.
Zara, which
has been worn by the Princess of Wales, Taylor Swift and, controversially,
Melania Trump, was the first brand in the group and remains by far the biggest.
It is budget friendly but not super cheap, drawing in shoppers with affordable
tailoring and on-trend items, especially dresses – most famously the 2019 polka
dot viral dress.
Ortega, who
at 89 is still regularly seen at the head office chatting with staff, was a
local clothing manufacturer who had worked his way up from being a delivery boy
at a shirtmakers when he opened his first shop. He is now the 12th richest
person in the world according to Forbes, with a net worth of about $120bn
(£880m).
More than
160,000 people work for the company he founded, more than 5,000 of them at the
Inditex HQ in Arteixo, a complex which includes the new, soon to be opened Zara
head office. Together they helped ring up sales of €38.6bn (£33.3bn) last year
and profits of €7.6bn.
As the
Guardian was given rare access to the building’s gleaming white corridors,
staff whizzed past on electric scooters or even bikes to navigate the vast
site.
But as the
company hits middle age, Inditex faces challenges. Sales growth slowed to 4.2%
in the most recent quarter, a slowdown from 10.5% in the previous quarter.
Like many
other retailers, the company is reducing its overall store estate – with a net
136 stores closed in the past year.
The slowdown
comes only a few years after a changing of the guard at Inditex, when the
founder’s daughter Marta Ortega Pérez stepped in as chair while former lawyer
and banker Óscar García Maceiras became chief executive.
Local boy
García Maceiras, who joined in 2021 from Spain’s Banco Santander, is seen as an
outsider with quite a lot to prove.
When we meet
in his spacious office, the conservatively dressed CEO, in tight-fitting blue
suit and shirt, is bullish about the company with which he shares a 50th
birthday year. “We remain very confident in our capability to keep on growing,”
he says.
While store
numbers are reducing globally, the amount of space devoted to Inditex fashions
around the world will increase by 5% this year as it shifts to ever larger
outlets.
In the UK,
for example, next month Zara will reopen its doors at Manchester’s Trafford
Centre with a store that is 40% bigger than before, while Pull & Bear is
doubling the size of its outlet there. Meanwhile, Bershka will open its first
store in Manchester.
Bershka is
also opening a new store in Glasgow this summer while Stradivarius, another
Inditex brand, is opening there and near Newcastle later this year. The group
is also looking for a site for The Apartment, a new concept that combines
premium Zara clothing and , in a store laid out like a stylish influencer’s
home. Right now there are only three in the world – in La Coruña, Paris and
Madrid.
The UK
expansion comes despite retailers’ warnings that a rise in taxes might depress
new store openings and hit jobs.
“We keep on
considering the UK a very relevant and attractive market,” García Maceiras
says.
Similarly in
the US, Inditex’s second-biggest market, he says the company will flex its
supply base, which includes factories in 50 countries, to deal with whatever
tariffs the Trump administration settles on. Inditex doesn’t use factories in
the US or Americas at present – but García Maceiras doesn’t rule it out for the
future.
Part of the
challenge for well-established fashion brands is the rise of online fast
fashion specialists Shein and its fellow Chinese-founded digital behemoth Temu.
García
Maceiras shrugs off such upstarts, saying Inditex is competing on style rather
than low prices and that the fashion industry has so many players that success
is not dependent on a single rival.
“This is a
market so highly fragmented that your level of success could depend basically
on your own capacity of spotting trends and executing those,” he says.
“The fashion
sector is connected with the inspiration and aspiration, and that is something
that requires permanent innovation and a permanent mindset of listening to
customer needs and customer desires in order to spot trends.
“The idea
for us going forward is to keep on innovating every day, to adapt with an
enormous level of flexibility to what our customers are looking for.”
This is
where Inditex thrives – with an almost unique model based on producing about
half its stock in relatively small amounts and less than a month before it hits
the shop floor. Even if something is incredibly successful, it will never be
reproduced exactly again.
When the
weather or the economic climate turns against them, most retailers must plough
ahead with plans made more than six months in advance. At Inditex, every store
receives a tailored assortment delivered twice a week. Local managers have
considerable control over what flows into their stores – feeding back what is
selling, and what customers are asking for.
Its new
larger stores are, meanwhile, designed to house an ever broadening array of
products and services. That includes more premium product to tempt in a broader
range of shoppers.
The new
stores are also given an upmarket feel, using material made from recycled
ceramics that looks like marble, and split into departments to house
sportswear, footwear and other growing categories.
Technology
is also helping lower costs and aiming to improve service. In Manchester,
shoppers will be able to return or pick up goods bought online with a scan of a
barcode thanks to robot-operated systems, while a new gadget will automatically
sort unwanted items from the changing rooms.
Many of the
tills will automatically scan in basket loads of purchases with the use of
smart radio-frequency tags.
The group is
also trying out different kinds of services including cafes, now in a handful
of stores in Spain, Japan, South Korea and China.
García
Maceiras says constant change is the key to the business staying healthy into
middle age. “This is a business in which you should take nothing for granted.”
Friday, 4 July 2025
Why 50,000 Iconic French Shirts, Intended for America, Sit in Storage
Why
50,000 Iconic French Shirts, Intended for America, Sit in Storage
Hit by
President Trump’s tariffs, the Saint James clothing factory has put its
inventory of striped shirts and sweaters intended for U.S. retailers in its
warehouse in France.
By Liz
Alderman
Photographs
and Video by Violette Franchi
Liz
Alderman, who writes about business and economics in Europe, reported from
Saint-James, France.
July 3, 2025
https://www.nytimes.com/2025/07/03/business/trump-tariffs-st-james-fashion-france.html
As fabric
spooled out of a bank of knitting machines in a flare of blue-and-white
stripes, workers at the Saint James clothing factory in France’s Normandy
region stacked them into piles and cut along patterns to make the company’s
iconic Breton sailor’s shirt, worn by celebrities and adored by fans worldwide.
Luc
Lesénécal, the company’s chief executive, surveyed an enormous workroom
splashed with a rainbow of yarns. Seamstresses had recently put the finishing
touches on 50,000 striped shirts and sweaters to fill orders for American
stores like Nordstrom and J. Crew.
But his
plans to ship for the fall retail season have been thwarted by President
Trump’s up-and-down tariff threats. Instead of loading the merchandise into
cargo planes, Mr. Lesénécal has parked his entire U.S. export in the company’s
warehouse, where it will sit until Wednesday, the deadline Mr. Trump has set
for Europe to come up with a deal or face tariffs of up to 50 percent.
“This is
yo-yo politics we’ve been dealing with,” Mr. Lesénécal said, gesturing around a
factory the size of three football fields, where 300 longtime employees turn
out 1.5 million shirts, sweaters, scarves and coats a year. “If we don’t have
visibility, we can’t move forward.”
He is not
alone. European industry has been whipsawed since Mr. Trump announced a barrage
of trade actions aimed at rewiring the global economy. America’s imposition of
10 percent tariffs on most goods from the European Union, and scattershot
threats to push the rates to 20 or 50 percent, has led companies to freeze
projects, seek exemptions and prepare to raise prices.
The European
Commission, the trade bloc’s executive branch, is working to persuade Mr. Trump
not to impose the harshest tariffs and is seeking a trade deal before the
deadline. The bloc already faces 50 percent tariffs on its steel and aluminum,
and 25 percent for cars and car parts.
“A trade war
makes both sides of the Atlantic poorer and is just stupid,” the Belgian prime
minister, Bart De Wever, said at a recent meeting of E.U. negotiators in
Brussels.
The zigzag
tariff policy, labeled “strategic uncertainty” by the U.S. Treasury secretary,
Scott Bessent, has confounded European executives. As president of a French
trade group representing businesses with a “Made in France” label, Mr.
Lesénécal now spends twice as much time as he used to dealing with tariff
issues.
When Mr.
Trump first announced that he would add an extra 20 percent tariff to goods
from the European Union on April 2, Mr. Lesénécal was bewildered.
The base
tariff on the classic Saint James sailor shirt, which costs $139, was 16.5
percent. “Our tariff jumped to 36.5 percent,” he said. “One week later it went
back down, but it was still 10 percent more than what we’d been paying.”
For now, he
is absorbing the additional 10 percent to avoid alienating the 150 American
retailers that sell his clothing. He can do that because Saint James is an
employee-held business, without shareholder pressure.
But the
prospect of higher tariffs looms, he said. The United States accounts for less
than 10 percent of Saint James’s exports, but the higher duty would be a
barrier to the U.S. market, where it has been present for 30 years.
“We don’t
want to leave the United States,” Mr. Lesénécal said, citing a loyal clientele
from Miami to Martha’s Vineyard, Mass. “Our clothing is an icon of ‘Made in
France,’ and Americans want the ‘art de vivre’ that it represents.”
Few items
are as French as the striped sailor shirts and sweaters that are made in the
Saint James factory, which sits in the shadow of the Mont-Saint-Michel abbey
near the English Channel and traces its roots back more than 130 years.
Craftsmen originally spun local wool into yarn to make fishermen’s
undergarments so tightly woven that neither water nor wind could penetrate.
In the
1950s, they evolved into rugged sailor sweaters and peacoats made for the
French Army. Saint James veered toward the public in the 1970s, emblazoning its
tops with a blue-and-white striped pattern, originally used by Napoleon III to
spot sailors who fell into the sea. The motif, copied by other retailers,
became a cult fashion item after Brigitte Bardot and Pablo Picasso wore striped
shirts everywhere. A billboard hangs on the factory floor showing Brad Pitt and
George Clooney riding a motorcycle in Saint James stripes.
As a French
heritage brand, the company could not open a factory in the United States
without losing its cachet. “That would be like trying to harvest a Bordeaux
wine in California,” Mr. Lesénécal said. “It would lose its essence.”
Recently, he
and his U.S. manager, Benjamin Auzimour, crafted a letter to American clients,
who place orders six months in advance. Should Europe’s deal with the United
States result in a tariff higher than the 10 percent Mr. Trump recently added,
the letter read, the excess would have to be borne by the retailer. “The risk
is that some of them may say consumers won’t buy at higher prices,” Mr.
Lesénécal said.
If U.S.
clients balk, he might redirect the clothing in the warehouse to other
countries, including Japan, where Saint James garments are popular — and there
is no excess tariff.
A temporary
loss of U.S. exports would not devastate the company, he said. But he has
frozen plans to open two new U.S. stores. In addition to the risk of tariffs
rising, he said, the U.S. dollar has weakened, raising his export costs.
“Maybe I’d
rather open more stores in markets where there is greater economic security,”
Mr. Lesénécal said.
The tariff
tension has a particular resonance in Saint-James, a town whose identity has
been entwined with America’s since the U.S.-led liberation of France in World
War II. Among the neat stone houses, American flags flutter alongside those of
Canada and Britain, which ousted German troops from Saint-James in July 1944.
The Brittany American Cemetery and Memorial, with more than 4,000 white crosses
commemorating fallen U.S. soldiers, is lovingly cared for by locals.
The Saint
James factory itself sits atop a World War II airfield that belonged to the
U.S. Army Air Force, marked with a warplane propeller and a plaque paying
homage to the United States. So it was surprising, said the U.S. manager, Mr.
Auzimour, to hear Mr. Trump claim that the European Union was created to
“screw” the United States.
“No one here
has forgotten what America did to secure Europe’s freedom,” he said, bowing his
head at the American cemetery. “We remember why the European Union was really
created: to prevent wars from happening again.”
Mr.
Lesénécal is hoping that the trade war will end without major economic
casualties. U.S. retailers have delayed putting in firm orders for the 2026
spring season until they have more certainty.
“I need to
order wool and cotton thread from Australia and New Zealand,” Mr. Lesénécal
said. “How can I do any of that when we don’t know what our business will be?”
“It’s a
domino effect,” he added. “We need stability.”
Liz Alderman
is the chief European business correspondent, writing about economic, social
and policy developments around Europe.
Thursday, 3 July 2025
Wednesday, 2 July 2025
King Charles axes ‘embarrassing’ train over soaring costs
Royal train
to be retired as King Charles seeks to modernise monarchy
Palace
accounts show Treasury funding to remain at £86.3m, while duchy of Cornwall
will waive some charity rents
Rachel Hall
Mon 30 Jun
2025 22.00 BST
The royal
family’s private “royal train” will be decommissioned as part of King Charles’s
drive to modernise the monarchy and reduce costs.
The train
has been used to transport members of the royal family around Britain’s railway
network since 1840, but it has become increasingly costly to maintain and
store. Rolling stock from the 1980s would need to be updated for modern railway
networks, and two new more fuel-efficient helicopters offer a suitable
alternative.
James
Chalmers, the keeper of the privy purse, said: “The royal train, of course, has
been part of national life for many decades, loved and cared for by all those
involved. But in moving forward we must not be bound by the past.
“Just as so
many parts of the royal household’s work have been modernised and adapted to
reflect the world of today, so too the time has come to bid the fondest of
farewells as we seek to be disciplined and forward in our allocation of
funding.”
Chalmers
said a search was under way for a long-term home for the train’s historic
parts.
The annual
royal accounts for 2024-25, published on Monday, show that the sovereign grant,
which is distributed by the Treasury to fund the official duties of the royal
family, will remain at £86.3m for a fourth consecutive year.
The grant
will increase to £132m annually between 2025 and 2027. This is partly to take
advantage of record offshore windfarm profits for the crown estate, which hit
£1.1bn in the last financial year, and also to cover the remaining £100m costs
for the final two years of Buckingham Palace’s £369m, 10-year refurbishment.
The accounts
also show that royal travel costs increased by £500,000 to £4.7m and payroll
costs were up £2m to £29.9m.
There was an
increase in the number of travel journeys costing over £17,000, from 24 in
2023-24 to 43 in 2024-45, reaching a total expenditure of £2.7m. Travel costs
for the king and queen’s state visit to Samoa cost £401,000 in public money.
As part of a
sustainability drive, one of the royal Bentleys is now powered by biofuels,
with the other due to transition this year, and a move to electric vehicles is
under consideration.
Separate
accounts also published on Monday reveal that the duchy of Cornwall, which
provides Prince William with a private income of nearly £23m a year, will waive
rents for grassroots groups such as wildlife trusts and the St Petrocs
homelessness shelter, and reduce rent for local charities by 50%.
This follows
a Channel 4 Dispatches and Sunday Times investigation last November into the
prince’s duchy and the duchy of Lancaster estate, which found that the estates
had secured rental agreements worth millions of pounds with the armed forces,
the NHS and state schools.
Will Bax,
the duchy of Cornwall’s new secretary and keeper of records, said the duchy was
also looking at including schools in the community groups that would be
eligible for the rent waiver. Commercial relationships with public bodies such
as the Ministry of Defence and the Ministry of Justice will not change.
Bax said:
“It would be remiss not to address the media scrutiny the duchy has experienced
this past year. We’ve used these challenges as an opportunity to stop and
reflect. Both the duke and I are clear that we want the duchy to be world-class
in our approach to supporting people, communities and nature to flourish, and
to realise that aim we must operate and communicate in a modern, socially
minded way.
“It’s clear
we’ve entered an era of deep change, but we change not because we disrespect
our past but precisely because we do respect it.”
The accounts
show the duchy generated profits of £22.9m, down £700,000 from £23.6m in the
previous financial year.
The annual
review for the Prince of Wales omits his income, expenditure and tax payments,
a move away from the transparency implemented by Charles as the previous Prince
of Wales.