It is a short walk from a tiny shop with peeling, yellow paint in downtown La Coruña, in northern Spain, to a dazzling, five-story store opened in September by Zara, by far the world’s most successful purveyor of “fast fashion.” In this stroll across three city blocks, the career of Amancio Ortega unfolds: from teenaged apprentice in the corner shop, Gala, a men’s-clothing business, to Europe’s richest entrepreneur and the majority owner of one of its best-performing companies.
Ortega, the son of an itinerant railway worker, started at the corner shop at 13 and had a basic upbringing: An ex-colleague said that he talks of meals of “only potatoes.” He has lived mainly in Galicia, a relatively poor region with no history in textiles. Nonetheless, it was there that, in 1975, he founded Zara—a manufacturer-cum-retailer that, along with its sister brands, has more than 7,000 shops globally.
He is now 80, but he remains energetic and involved in the business, if uninterested in himself wearing trendy clothes. He owns nearly 60 percent of Inditex, the holding company of Zara and the other chains, which is worth some $106 billion. According to a September article in Forbes magazine, his total assets of nearly $80 billion, including his properties and other holdings, briefly surpassed even those of Bill Gates.
The manner in which he rose does not fit the usual template. His lack of formal education has profoundly affected his management style. Those close to him confirm that he does read—novels and newspapers—but he is reportedly ill-at-ease with writing at length. He has never had his own office, desk or desktop computer, preferring to direct his company while standing with colleagues in a design room of Zara Woman, the flagship line.
A former long-term CEO of Inditex, and Ortega’s business partner for 31 years, José María Castellano, said that his ex-boss’s working method is to discuss things intensely with small groups, delegate paperwork, listen hard to others and prefer oral over written communication.
This preference for close personal interaction may even have helped him concoct the formula behind Zara’s success. At a time when the fashion industry mostly outsourced production to China and other low-wage countries, as it still does, Ortega decided to keep most manufacturing close to home. Some 55 percent of Zara’s happens in Spain, Portugal and Morocco, near the company’s main markets. That in turn allows twice-weekly deliveries of small but up-to-the-minute fashion collections to every store. Inditex’s share price has soared tenfold since its flotation in 2001, outstripping rivals such as Gap and H&M.
His leadership style appears to favor extreme introversion. However, that low profile leaves room for other top executives to shine. Inditex’s chairman and CEO, Pablo Isla, has run things since 2011, yet Ortega shows up to work every day.
Like other rich recluses—such as Ingvar Kamprad, the Swedish founder of the IKEA furniture chain—he goes in for only limited philanthropy. He pays for 500 annual scholarships for Spanish students in America and Canada, and gives to Catholic charities and for emergency relief.
Like others in southern Europe, he also may be wary of inviting political attacks, such as when Pablo Iglesias, of the left-leaning Podemos party, insinuated during a lament about inequality that Ortega was a “terrorist.”
The managers of his wealth, which grows by some $1 billion a year, say that they are now scrambling to have slightly less dependence on Inditex, in line with normal investing principles—a difficult task because Ortega only wants real estate, an investment “he can touch,” but one which is time consuming to buy and manage. In December he spent $517 million on Florida’s largest office tower, the Southeast Financial Center in Miami.
Most of his income is still from Inditex dividends. On December 14 the company reported results that, once again, met high expectations in financial markets. The numbers doubtless gratified the limelight-loathing Ortega, who is said in private to chide others to admire his company, not himself.
© 2016 Economist Newspaper Ltd., London (December 17). All rights reserved. Reprinted with permission.
Image credits: Leo Ramirez/Agence France-Presse/Getty Images