Zara: Expansion Blues

In the early 1990s, Zara looked towards the US, but decided against entering it in a big way. Zara believed that it still had plenty of room to grow in Europe before the market became saturated.

Moreover, the experiences of other European retailers like Benetton and H&M had not been encouraging.

In 1989, Zara opened its first store in Manhattan. It continued its 'go slow' strategy in the US till 2003, when it seriously started considering a larger presence in the country.

Zara accounted for over 80% of Inditex's total international sales – a significantly high number for an organization that had seven other chains.

If Zara failed in the future, Inditex would have to reformulate its strategies, apart from facing a financial crisis of sorts.

Inditex was directing much of its new investment into various other retail chains, some that it had created and others that it bought. It was not clear how successfully Inditex could apply the Zara approach to its smaller chains...