Amancio Ortega shook up the retail industry with his “fast-fashion” revolution. Now he’s the richest man in Spain and has a property empire bigger than the Duke of Westminster’s.
Move over Hugh Grosvenor, there’s a new European property king. According to Bloomberg data, the founder of Zara, Amancio Ortega, has quietly overtaken the real-estate heirs of London to hold the continent’s biggest portfolio – with assets worth $13bn, compared with $12bn for the young Duke of Westminster and $7bn for Charles Cadogan. Not bad for a man who grew up so poor that there were periods in his childhood when he ate “only potatoes”.
At 83, Ortega is Spain’s richest man, with a fortune put at $63.6bn – most of it derived from his majority stake in Zara’s parent Inditex, the world’s largest fast-fashion operator. For some years Ortega’s wealth managers have been scrambling to diversify his wealth, says The Economist. Property was the natural choice for a mogul who likes an investment “he can touch”. And of late the chief target of Ortega’s investment firm, Pontegadea, has been the US, where he has spent $3bn over the past six years – typically on landmark properties in key cities. Like many multibillionaires, he mostly pays in cash.
How he turned fashion on its head
Inditex is still based in A Coruña, the Galician port on Spain’s rocky Atlantic coast where Ortega grew up and opened his first factory in 1963. The now sprawling complex is where more than half of the group’s garments are still cut and processed, says The Sunday Times. Sparsely populated Galicia has a distinctly “humble” culture that Inditex insiders say has “become part of the company’s DNA”. Certainly, Ortega’s “beginnings are as humble as they come”. The son of a railway worker and a housemaid, he started work as a tailor’s assistant at 14, graduating to become a shop manager before taking the leap into manufacturing at 27. Focusing initially on bathrobes and dresses, he opened his first retail store in 1975. He planned to name it after a favourite film, Zorba the Greek, but a bar down the road was already using the name. “Having already made the moulds for the sign, Ortega chose a name that would keep as many letters as possible: Zara.”
Right from the start, Ortega turned the fashion industry’s established modus operandi on its head. Rather than deciding what people should wear, then trying to persuade them to buy it, he asked shoppers what they wanted and designed the products accordingly. Before a global push in the 1980s, Ortega built a pioneering system linking Zara’s talented young designers with its factories, warehouses and stores. It was the start of a fast-fashion revolution that left rivals trailing. These days, garments “fly from the design room to the shelves of stores in New York and Tokyo within four weeks”.
In 2008 Inditex – whose other brands include Pull&Bear, Massimo Dutti and Bershka – overtook Gap to become the world’s largest clothes retailer by sales; in 2011, it usurped Banco Santander as the biggest company in Spain. Success has posed problems for Ortega, “whose leadership style appears to favour extreme introversion”, says The Economist. He is so self-effacing that investors visiting in advance of the firm’s 2001 float “awkwardly” confused him with other staff. He has always preferred to direct his firm while standing with colleagues in the design room – “he has never had his own office, deskor computer”.
No model stays brilliant forever in business, and the challenge facing Inditex is how long it can keep growing, and at what pace, says the Financial Times. Ortega, who retired in 2011, is out of the daily fray, but still occasionally drops by the staff canteen. Described by one financier as “a man of the people”, it must have come as a shock when Spain’s Podemos party recently insinuated during a lament about inequality that he was “a terrorist”. If so, he’s been a remarkably productive one for Spain.