Rags to Riches: How Zara’s founder Amancio Ortega became one of the richest man in the world

He was a son of a railway worker, born in 1936, just before the outbreak of Spain’s civil war. His family struggled to make ends meet, which made a lasting impression on him when he was a young boy.

“One day Amancio Ortega and his mother went to pick up some groceries,” according to Covadonga O’Shea, author of a biography of the Zara founder.

‘From below the counter, he heard someone tell his mother, ‘Senora, we’re sorry, we can’t give you any more credit.’

Ms O’Shea, launching her book in 2012, said Mr Ortega was down and felt a lot shame at his family’s inability to pay or buy things that were basic necessities of life.

‘When Amancio was telling me this, he was terribly emotional and was deeply hurt and humiliated.’

When he experienced this humiliation, he promised himself that he will never to let his family suffer poverty again. He immediately left school, and went to work in a shirt shop because he wanted to make a career and make good money for the rest of his life.

He gradually learned from his experience while working with other retailers and by the early 1960s, he was ready to set up a business with members of his family and his future wife, Rosalia Mera. They laid down the foundation of a textile manufacturing company, then later founded ‘Zara’.

Little did Amancio know that this brand will quickly become one of the most famous brand in the world.

Success was not a mere luck. Amancio’s smartness and wisdom played a pivotal role in his brand’s outreach.

He realized that the shops were taking too long to bring people the fashions they craved for. By the time a particular product arrived, fashion-conscious shoppers were already demanding something different. He figured out that if Zara were to succeed, they would have to shorten that demand turnaround time.

So, Amancio Ortega did something quite unique. He set up with the ambition to give the customer what they want rather than selling whats on the display. It was a concept that dramatically turned the tables around and the rest is history.

Zara listens to what its shop managers tell them. They ask what are customers demanding and wishing to buy.

It’s a pull model from the consumer rather than pushing the product onto the consumer

This concept quickly made Zara one of the most popular brands in the world. in 2016, Mr Ortega’s fortune overtook Microsoft’s founder Bill Gates as the world’s most richest man. This was not Mr Ortega’s first time at the top of the tree. In October 2015, he was the world’s wealthiest man for just few hours before Bill Gates re-claimed the title. It was hailed as a milestone in Spain and celebrated as well.

He currently ranks as the world’s 6th richest man according to Forbes list of richest billionaires of 2018. Amancio Ortega earns more than $400 million in dividends from Zara and sister companies every year.

 

Written by Hisham Sarwar

https://www.youtube.com/watch?v=OAi5HVJbixQ

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