The hardworking and secretive life of Zara's owner
Having a difficult family, Amancio Ortega dropped out of school to become a tailor and worked hard to build the Zara empire for 40 years, before investing in real estate when he retired.
According to the Bloomberg Billionaires Index, Amancio Ortega is the 14th richest person in the world in 2023. Four decades of running fashion retail giant Inditex - the world's largest clothing retailer that owns Zara and many other brands - but he was extremely secretive. No photos of him were published until 1999.
A Zara employee who worked with him told The Economist in 2016, "the true story of Amancio Ortega has yet to be told." So what does the public know so far about the clothing retail tycoon whose net worth is estimated at $75 billion?
Amancio Ortega, Founder of Inditex. Photo: AFP
Amancio Ortega (86 years old) comes from a humble background. He was born in northwestern Spain in 1936, the son of a railway worker and a housewife. In his official autobiography, he recounted the bitterness at the age of 12 when he saw his mother leave the store empty-handed because she could no longer buy on credit.
His entrepreneurial spirit sparked during those years. Ortega dropped out of school to work for a luxury men's shirt store in A Coruña, taking his first steps in the textile industry that would later help him build his fortune.
After working as a laborer, with the help of his sister, brother, sister-in-law and future wife Rosalie Mera, Ortega established his own garment factory. In 1963, he founded his own store named Goa. In 1975, Ortega and Mera together opened the first Zara store in downtown La Coruña, Spain.
"Zara" wasn't actually the first choice for the store's name. He intended to name it Zorba, after the movie Zorba the Greek, but a local bar already used that name. Because he had bought molds printed with the letters ZORBA, he decided to use these letters and finally settled on "Zara".
Ten years later, in 1985, Ortega merged Zara into a holding company called Inditex. He and Mera separated around that time, but she remained the company's second-largest shareholder. Ortega owns 59% of Inditex, currently the world's largest clothing retailer. Inditex owns a portfolio of fast fashion brands. The best known is still Zara with nearly 3,000 stores in 96 countries.
In addition, Inditex owns Pull&Bear, a youth-focused retail label with more than 970 stores in 76 markets across Europe, the Middle East, Africa, Asia and South America; and Bershka, the group's second largest store chain, accounting for 9% of total revenue. Several other brands also belong to Inditex including Massimo Dutti, Stradivarius, Oysho, Uterqüe and Zara Home.
At the end of last week's session, Inditex's capitalization reached 111.17 billion euros (117.8 billion USD). So what is his formula for success? It's about working and constantly challenging the status quo. "I've always believed that to be successful, we have to turn the organization upside down every day," he explains.
To reduce costs, Ortega was the first to understand the importance of logistics. In 1984, he revolutionized the process by building the first warehouse. He is not afraid to learn from his mistakes. "My university is a business," he said.
Since 2000, Inditex's design team releases 10,000 new models every year. In 2017, they produced 700 million items of clothing and hit shelves in just 5 weeks compared to 9 months for other companies in the same field. High speed helps them respond immediately to customer desires and spend very little on marketing.
By 2011, at the age of 75, he transferred the chairmanship of Inditex to his right-hand man Pablo Isla, when the group had 5,000 stores in 77 countries, employed 100,000 people and generated revenue of 12.5 billion euros. His retirement was successful when 7 years later, Pablo Isla still maintained double-digit growth for Inditex.
From his native Galicia, where he returned to live, the businessman continued to oversee his empire. Once a week, he chats with Pablo Isla to discuss the most important issues. However, Ortega has never hidden the fact that Pablo Isla is only an intermediary solution.
His dream is to pass on the empire to his youngest daughter Marta, the result of his second marriage to Flora Pérez in 2001. His options for successors are quite limited. The eldest daughter, Sandra Ortega Mera, is the child of Mera's ex-wife, who passed away in August 2013. She controls 5% of Inditex but does not participate in management and only focuses on the family's charity fund. Meanwhile, middle son Marcos is disabled.
Therefore, since 2001, the youngest daughter Marta has continuously advanced in the product department - one of the most strategic departments. By 2022, Marta officially takes over as president. She was married to top Spanish equestrian Sergio Álvarez Moya in February 2012, but separated in 2015. In November 2018, Marta married Carlos Torretta, a model manager and child. designer Roberto Torretta's son.
Amancio Ortega and daughter Marta. Photo: Instagram amancioortegagaona
In addition to arranging a successor, billionaire Ortega also rearranged his assets from the end of 2017. At that time, he transferred assets to the investment company Pontegadea Inversiones, controlling 50.1% of Inditex. In total, Amancio Ortega owns 59.3% of Inditex shares as he also holds personal shares.
Pontegadea Inversiones also owns 100% of Pontegadea Inmobileiaria, a company specializing in real estate investment. According to Bloomberg , since Inditex IPO in 2001, billionaire Ortega has received about 10 billion USD in dividends. Most of the money was reinvested in real estate through Pontegadea Inversiones. So what is this billionaire's real estate volume?
In 2011, he bought Torre Picasso - the tallest 157 m building in Spain in Madrid, for 536 million USD. In 2016, he spent $551 million to buy another skyscraper in Madrid, Cepsa Tower. That same year, he invested in Epic Residences & Hotel, a 54-story skyscraper in Miami (USA).
In 2015, he spent another 70 million USD to collect an entire block of prime real estate in Miami Beach. He is also said to have bought an office block in the Mayfair area and a property on the Oxford shopping street, London.
In New York, he bought the 490 Broadway building on the corner of Broome Street for $145 million in the same year 2015. A year later, he hunted for another property here, a hotel at 70 Park Avenue in Murray Hill. for 67.6 million USD.
In 2019, Ortega spent heavily on real estate, buying a hotel in downtown Chicago for $72.5 million, a building in downtown Washington DC, and two office buildings in Seattle that Amazon leased. with a total of 1.1 billion USD.
Billionaire Ortega also owns several residential properties. He and his wife live in La Coruña, Spain, near a major Atlantic port. At one time, he also owned the Pazo de Dodro farm and estate near La Coruña. The estate was the site of his daughter Marta's first wedding, but it is unclear whether he still owns it.
Most recently in August, he bought a 45-story apartment tower in Chicago for $232 million. The building has 492 apartments along with a fitness center, yoga studio, dog park and pet spa.
Outside of real estate investment, billionaire Ortega leads a quiet and simple life. In 2012, it was reported that Ortega drove an Audi A8 sedan. He also owns an $84 million superyacht called Drizzle, but is said to have put it up for sale in 2022. Anyway, he rarely goes on vacation.
In fact, Ortega didn't take his first vacation until 2001, after Inditex's IPO. It was not until 2001, on the occasion of the company going public, that Ortega agreed to take an official photo of him.
Bloomberg reported in 2012 that he avoided working in a private office and often sat with designers and fabric experts at Zara's headquarters. He also often has lunch with employees in the company canteen.
Ortega only wears a simple uniform of shirt and pants and usually does not wear his company clothes. In his free time, he can often be found participating in horse racing events. He also built an equestrian center near La Coruña, where his daughter Marta competed in show jumping.
Billionaire Ortega founded the Amancio Ortega Foundation in 2001, a charity focusing on education and social welfare. In 2017, the foundation donated $344 million to public hospitals in Spain to fund the latest technology in breast cancer screening and treatment.
In 2020, Mr. Ortega personally donated about 68 million USD to help fight Covid-19, including purchasing ventilators, masks and testing kits for the Spanish health system.
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