This text is about how Zara has become so profitable. One of the keys to learning the language is increasing your knowledge of English vocabulary words. Some words/phrases that may be new for you are highlighted and explained below.
All of Europe is talking about the Euro crisis and how hard business is… but not for ZARA. It is the world's largest clothing retailer and has just made a €432m profit. That is even higher than forecasted. Their secret weapon is expansion. Shoppers are generally spending less and many shops and retailers are closing down throughout Europe. Yet, Zara has reported a 30% increase in the number of customers visiting their stores. This is a huge amount of shoppers who now prefer Zara to other clothes shops. As a result, the retail giant has become Spain’s largest company. It is so big that it can design, make and sell new clothes within just 2 weeks. That’s why they seem to have the newest fashions on the high street. This "fast fashion" formula has proven a hit at home and abroad. Zara’s domestic market only accounts for a 1/4 of their sales so where is the rest from? Well, they have expanded almost everywhere, establishing chains in 85 countries including the very profitable emerging markets such as Asia. Due to this expansion they now only make 1/3 of their clothes in Spain and so save money on transport and labour costs. The clothing giant’s main competitors are faring far worse. Esprit and H&M see sales flagging. Zara, on the other hand, is expanding even more, opening 91 stores in 26 different markets including a flagship store on New York's Fifth Avenue. Zara has even expanded into other areas too. It now owns eight other retail brands including Bershka, Massimo Dutti and Pull & Bear. In total Zara has more than 5600 stores worldwide and an estimated market value of nearly €48bn. The future of Europe may be uncertain but Zara’s future looks very bright indeed!
Useful English Vocabulary Words
- Euro crisis
- The current big economic problems in Europe
- Forecasted
- Predicted
- Secret weapon
- Powerful strategy or method
- Expansion
- To grow and move into other areas
- Retail giant
- A big retail company
- Fast fashion
- Clothes shops that can create and sell new designs very quickly
- Proven a hit
- Become popular
- Domestic market
- Selling in the home country of the business
- Emerging markets
- New places where you can sell lots of products
- Labour costs
- The price you pay employees
- Faring far worse
- Doing badly in comparison
- Sales flagging
- Poor and maybe declining sales
- Flagship store
- The main shop which is a good symbol of the company
Discussion Questions
- Why do you think Zara is so popular?
- What can other companies learn from their success?
