If you have no hope that you can make money through your efforts and dedication, just take a look at the life of self-made billionaire Amancio Ortego to find out how he reached success with his clothing retail. Being a son of a railway worker receiving no formal education, while working as a delivery boy to a shirtmaker in the past, would have never been expected to become one of the wealthiest clothing retailers in the world today.
As of October 2022, Amancio Ortego net worth is approximately $70 Billion and he is considered the second-wealthiest person in Europe after Bernard Arnault.
But still, he maintains a low profile and is mostly seen dressed simply, takes his coffee from the same place, and eats with his employees. So Who is Amancio Ortega really? What is his life story? How did he reach this position? Continue reading.
Early life of Amancio Ortego
Amancio Ortega was born Amancio Ortega Gaona on 28th March 1936 in Busdongo de Arbas, which is a small village with less than 100 citizens located in the northern Spanish region, of León, Spain. He belonged to a middle-class family where he was born to a railroad worker and a maid.
He was born the youngest of four other children and due to Amancio’s father’s job at the local railway station, the family had to La Coruña, Galicia, Spain. But they were extremely poor and had to live in a beggarly house at the railway workers’ quarters. While his mother was employed as a housemaid and she would plead for credit at local stores being unable to afford essential items.
Due to poverty, Amancio had to leave school at the age of 14, and he started to work. He started his career as a teenager in La Coruña, Spain, which is the traditional center of the Iberian textile industry. He worked as a delivery boy for a shirtmaker who produced clothing for the rich. And later he worked as a draper’s and tailor’s assistant. He learned to make clothes by hand.
How did he learn his business idea?
Amancio Ortego saw the costs mount as garments moved from designers to factories to stores and through this, he learned the importance of delivering products directly to customers without using outside distributors.
He worked hard in his teens and whenever he had free time, he enjoyed riding his bicycle around the town. Maybe it could have been during one of such rides, Amancio Ortego realized the business ideas and how to make good money.
He learned that one should give customers what they want to earn a good amount of money. When he was 16 years old, he was wondering on how to out what the customers need and how to meet their demands.
In the early 1960s, Ortega became the manager of a local clothing shop. There he noticed that only a few wealthy residents could afford to buy expensive clothes. So he thought of producing similar items at lower prices, by purchasing cheaper fabric in Barcelona and cutting out pieces by hand using cardboard patterns.
Ortega then sold his items to local shops and he used the profits to start his first factory in 1963 at the age of 27. He found an autonomous community of Spain, Galicia as the perfect spot for his business plan: where he saw poor job alternatives in combination with numerous single women who could sew pretty well. Amancio Ortega started to organize women into sewing cooperatives including a product line of lingerie, babywear, and nightgowns.
Started his first business
Purchasing cheaper fabrics, cutting pieces by hand, and selling them, made Amancio Ortego start his own business. After having gained ten years of experience in managing sewing cooperatives, in 1963, founded his first company, Confecciones GOA, S.A. which he named from his initials to read backward. He began selling quilted bathrobes
It was turned into a family company, where Amancio was responsible for developing new fashion trends, his brother Antonio was heading the commercial issues, his sister Josefa was responsible for bookkeeping, and Rosalía Mera Goyenechea was performing as his business partner.
Amancia Ortego Zara owner
After successfully establishing his first business in the manufacturing of bathrobes, Amancio Ortega decided to expand his business into men’s, women’s, and children’s wear. In 1975 he found the name Zara and along with his wife Rosalía Mera whom he married in 1966, he opened his first store in central A Coruña. It was one of the most important department stores.
Soon Zara was well-reputed for selling quality designer fashions at reasonable prices. Although this method had been used successfully by Gap in the United States and in Great Britain, it was entirely new in Spain where the large Corte Inglés and Cortefiel controlled the midrange clothing market, but neither appealed to youthful fashion sense.
The company’s first annual report was first produced in 1999, outlining Ortega’s goal, and there it was stated that the aim of Zara was to normalize fashion. The idea of fashion was actually a privilege, but the company offered accessible fashion that reached the high street, inspired by the taste, desires, and lifestyles of modern men and women.
The store soon proved to be a success and over the course of the following decade, Ortega opened further stores across the region and wider Spain. By 1989 Ortega had opened nearly one hundred stores in Spain.
The store became so successful, and there was no need for an advertisement for the store. Just the word of mouth made enough sales and the chain mainly depended on frequent repeat customers. Zara merchandise even became acceptable in the world of high fashion.
In 1988, he opened the first Zara store abroad, in the Portuguese city of Porto and it was just the beginning of the expansion. Zara stores were opened across Europe, Asia, the Middle East, Africa, and America during the 1990s.
Amancio Ortego’s Inditex company
While the Zara stores were growing in success across Spain, the parent company Inditex in 1985 was opened by Ortego. It was the holding company he created to represent his well-known Zara clothing chain along with other smaller chains. Zara stores remained the heart of the Inditex company, sibling stores Oysho and Pull&Bear were expanded and founded by the group.
The success of the company was actually based on the fast-fashion model, where the clothing is brought from the design stage to the store in a few weeks. They surveyed designs at fashion shows and the in-house designers copied the most promising ideas. New clothes were pushed into stores within weeks in the company’s manufacturing base and distribution network, which is up to 12 times faster than the competition.
In Spain, it became the biggest multinational textile company as well as one of the largest in the world. More than 12,000 workers worldwide were employed by the company. Operations of Zara and other Inditex chains were carried out in the United States, Latin America, Italy, Kuwait, Japan, and Great Britain.
Fewer pieces were shipped by Inditex in greater variety and they avoided high inventory costs, more often, and the frequent clearance sales common among most fashion retailers.
As the whole system was computerized, Ortega was able to determine when to restock or drop a design, moreover, the company produced only what was needed to sell in its shops making the structure give advantages over its competition.
Up to 15 percent was spent by Amancio Ortego on labor costs, and he saved by doing almost no advertising. He quickly adjusted to fashion trends and minimized shipping costs by keeping production close to markets. It largely avoided criticism from human-rights activists, since the company did not exploit workers in developing countries.
In many business schools, the Inditex model came to be taught, which replaced the model that had called for complex global networks taking nine months to get clothing from the design stage to the store.
In 1991, they acquired Barcelona-based Massimo Dutti and in 1995 Stradivarius. And so Inditex dominated the high street in Spain.
In 2011 Ortega launched Inditex on the stock market and to this day he keeps a 60% stake in the company.
There is a lot to learn from Amancio Ortego
He was really quick
Amancio Ortega Zara owner set up his retail world with an aggressive schedule that was meant to get new clothes on the rack faster than anyone else in the market. His strategy was to refresh the stock in Zara stores twice a week and receive orders within 48 hours.
This is where the Zara store was able to stand out in the crowd where it would have a similar design of a dress modeled (which during Fashion Week takes months to arrive in a department store) in just a few weeks later.
Stucked with his motto
He was consistent in his goal where the customers were his main center of attention, both in the creation of the fashion collections and in the design of his shops, of the logistical system, and of any other activity.
Ortega’s fashion awareness comes by observing what people are wearing and listening to what they want by tracking bloggers and listening to customers and he made sure to always adjust to the current season’s trends.
He was especially concerned with the increased usage of social media platforms, such as Instagram.
Controlled the supply chain
Usually, the fashion firms due to the cheap labor costs had their clothes made in China. But Ortego is sourced mostly from Spain, Portugal, and Morocco.
The designs are cut from materials finished and treated in his mills and then sewn by a network of local shops, shortening the supply chain and allowing the company to react quickly to new trends.
Amancio Ortego, a private and simple man
Ortega leads a very normal everyday life, despite being the richest man in the world. He retired from CEO in 2011, but visits the Inditex Headquarters in La Coruña daily, and still contributes product ideas, from his 60 years of retail experience, and he is often seen tucking into lunch in the work canteen.
Ortega normally wears gray pants with a white shirt and blue blazer to work, none of which are Zara products. He lives in a quiet area of A Coruña with his wife and in his free time he is rumored to enjoy horse-riding
He married his first wife Rosalía Mera in 1966. But unfortunately, the couple got divorced in 1986. After this, he went on to marry his second wife Flora Pérez Marcotte in the year 2001. Ortega has three kids, Sandra Ortega Mera, Marta Ortega Pérez, and Marcos Ortega Mera.
He stays away from the media glare and he never granted interviews to the media. It was in 2000, the world got its first look at Ortega when his company decided to go public. However, even then Ortega gave interviews to just three journalists.
He is also the proud owner of Spain’s tallest skyscraper. The Torre Picasso located in Madrid cost Ortega $536 Million. He has his own private jet designed by Bombardier which is estimated the plan cost $45 Million.
The first job Amancio Ortega was as a shop assistant at a local company called Gala. It is still active and opens on one of La Coruña’s downtown corners selling traditional shirts, caps, and cardigans, José Martínez, who inherited the Gala business from his father, reported that the visitors never buy, but they simply ask about his youth friend, Amancio Ortego.
In 2015, Ortega was listed as the richest man in the world, overtaking Bill Gates at the top of the Forbes rich list.
Considered Spain‘s most successful businessman of all time, he has been an inspiration to a country that at times has struggled with economic crises and turmoil.
Although his personal life is known a bit, the mystery surrounding Ortega and his life has always attracted the press which even led to books being published about him.
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