Fashion and Zara

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Zara Case Study: Fast Fashion from Savvy Systems After studying this case you should be able to: Understand how Zara used a technology-dominated strategy to make its parent company, Inditex, the world’s largest fashion retailer. List the factors leading to the demise of Gap. Understand how the application of technology to data collection and analysis allows Zara to spot trends and gain insight into the future preferences of customers. Identify the strategies, and the technologies used to implement them, that Zara employs to give its manufacturing and logistics operations a huge competitive edge. Appreciate the differences between Zara stores and other retail apparel stores, and how theses differences relate to Zara’s ability to make…show more content…
Drexler’s team had spot-on tastes throughout the 90s, but when sales declined in the early part of this decade, Drexler was left guessing on ways to revitalize the brand and he guessed wrong—disastrously wrong. Chasing the youth market, Drexler filled Gap stores with miniskirts, low-rise jeans, and even a much-ridiculed line of purple leather pants.Boorstein, 2006. The throngs of teenagers he sought to attract never showed up, and the shift in offerings sent Gap’s mainstay customers to retailers that easily copied the styles that Gap made classic. The inventory hot potato Drexler was left with crushed the firm. Gap’s same-store sales declined for 29 months straight. Profits vanished. Gap founder and Chairman Dan Fisher lamented “It took us 30 years to get to $1 billion in profits and two years to get to nothing”Sellers, 2003. The firm’s debt was downgraded to junk status. Drexler was out and for its new head, the board chose Paul Pressler, a Disney executive who ran theme parks and helped rescue the firm’s once ailing retail effort. Pressler shut down hundreds of stores, but the hemorrhaging continued, largely due to bad bets on colors and styles.Lee, 2007. During one holiday season, Gap’s clothes were deemed so off-target that the firm scrapped its advertising campaign and wrote off much of the inventory. The firm’s model of drawing customers in via big-budget television promotion had collapsed.

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