FORBES-ORTEGA Spanish recluse behind Zara briefly becomes world's richest man

Record ID: 135252

  • Title: FORBES-ORTEGA Spanish recluse behind Zara briefly becomes world's richest man
  • Date: 23rd October 2015
  • Summary: A CORUNA, SPAIN (FILE - DECEMBER, 2008) (REUTERS) VEHICLES DRIVING PAST INDITEX FACTORY GATE SURROUNDING FACTORY EXTERIOR OF FACTORY SIGN READING INDITEX / EXTERIOR OF FACTORY VARIOUS OF EXTERIOR OF ZARA SHOP SIGN READING "ZARA" PEOPLE WALKING PAST ZARA SHOP
  • Embargoed: 7th November 2015 12:00
  • Keywords:
  • Location: Spain
  • Country: Spain
  • Topics: General
  • Reuters ID: LVAA4EMMSP04AXD7EHXD0DE4S26A
  • Aspect Ratio: 16:9
  • Story Text: Spain's Amancio Ortega, who transformed clothing group Inditex from a tiny family dressmaker into a global fashion powerhouse, was ranked the world's richest man by Forbes on Friday (October 23) for the first time.
    Admired by retailers worldwide, Ortega has turned Zara into a byword in chic for both the money-conscious as well as international celebrities from U.S. pop queen Taylor Swift to Britain's Duchess of Cambridge.
    The reclusive Ortega overtook Microsoft founder Bill Gates and Mexican telecoms magnate Carlos Slim to become the richest person on Forbes' 2015 'real time' ranking of billionaires on Friday with a fortune put at $79.9 billion.
    Inditex, the world's biggest fashion retailer, ahead of Gap and Hennes & Mauritz, has moved from humble beginnings in the rainy northern region of Galicia to more than 6,000 stores in some 90 countries with a stable of brands from high-end label Massimo Dutti to home wear chain Zara Home.
    With a capitalisation of 104 billion euros ($110 billion), the group is also Spain's biggest company by market value and only the third ever to reach the 100 billion euros mark after lender Santander and telecoms giant Telefonica -- although the two are now lagging behind.
    Shares have risen nearly 40 percent in the year to date as relentlessly rising sales attract investors to the stock, trading at 34 euros a pop on Friday. Ortega owns 59.3 percent of the company.
    Inditex's success is built on a formula of endless renewal, with dresses and blouses displayed in thousands of Zara stores worldwide for only a few days before they are taken off the rails and replaced with new lines of must-have garments.
    Experts credit Zara with transforming the apparel business through "fast fashion". Affordable imitations of catwalk designs can move from drawing-board to stores within two weeks - and poor sellers are pulled off the shop floor even quicker.
    In a country recently emerged from a devastating recession which has destroyed businesses and jobs, Ortega is a rare self-made mogul amid a corporate culture dominated by family dynasties.
    The son of a railway worker started his professional life at 14 as a delivery boy with a shirt maker in the wind-swept northern city of Coruna.
    Within a few years he had set up a workshop making nightgowns, lingerie and babywear and the first Zara opened in Spain in 1975. Its marble-clad flagship emporiums are now found on high-end shopping drags from Russia to China.
    Ortega has never been interviewed and is rarely photographed. He did not even attend the inaugural ringing of the stock market bell at the Madrid exchange when Inditex floated in 2001.
    In person, Ortega is a persuasive and enthusiastic businessman, who despite progressively handing over the day-to-day management of the company over the last decade continues as an active part of it, people familiar with Inditex say.
    Ortega's decision to select designs based on feedback from shop assistants who zeroed in on shoppers' reaction to the attire on display in Zara, has been key to building up the business.
    Since his ex-wife and co-founder of Inditex Rosalia Mera died suddenly in August 2013, there has been intense speculation over the succession of Ortega, who will be turning 80 years old next March.
    His second wife Flora Perez, 61, sits on the board of Inditex and their daughter Marta, who has undergone training at the firm, including working in a store, is widely expected to take over one day although the firm won't confirm she will be the successor.
    Ortega's majority stake in Inditex is held through another company, Pontegadea Inversiones, which Ortega has also used to channel the steady flow of dividends and build up a real estate giant whose assets were worth 8 billion euros at end-2014.
    This, as well as favourable inheritance laws in the Galician region, means that his heirs are likely to keep a tight control over the fashion empire.
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