People scrolling past Zara’s adverts on Instagram would be forgiven for confusing them with those of Chanel. For its 50th-anniversary campaign last spring the Spanish fast-fashion brand hired Steven Meisel, a photographer who is known for working with luxury houses. The hairstylist and make-up artist on the shoot were of a similar pedigree. The ads featured almost every top-paid model of the past 30 years shimmying to Donna Summer’s “I Feel Love”.
Such glamour bespeaks a winning strategy for Inditex, a Spanish clothing group, which relies on Zara for about two-thirds of sales. Competition from the likes of Shein and Temu, two Chinese even-faster-fashion retailers, has driven some rivals to cut prices. But Inditex has competed on style rather than cost, says Geoff Lowery of Rothschild, a bank. On March 11th it reported bumper results. Annual sales grew to €40bn ($46bn) in 2025 and net income rose to a record €6.2bn, up by 6% on the previous year. Selling fast-fashion with a luxurious gloss is reaping rewards.
Óscar García Maceiras, Inditex’s boss, ascribes much of the firm’s success to its half-century-old business model. Amancio Ortega, the founder, built the business around an agile logistics network that let it adjust merchandise quickly based on shoppers’ tastes. Zara and its sister brands aim to offer new items each week, sometimes even twice a week. This lowers the risk that the brand produces clothes that nobody wants and has to sell them at a steep discount. It also lets Zara set high prices, because its garments can quickly reflect popular styles.
When Shein and other Chinese brands entered the market in the early 2010s, they competed on speed and cost. That hurt Zara less than H&M, its big European rival, because it had a broader range of wares, including more expensive items. Zara targets shoppers in their 30s and 40s who tend to be richer than those of H&M, notes William Woods of Bernstein, a broker. As a consequence, Inditex has surged past its competitor. In 2009 its operating profits were roughly on a par with those of H&M. Today they are almost five times bigger.
Lately Zara has gone more upmarket still. In late 2021 it appointed Marta Ortega, the daughter of Mr Ortega, as chair. She has aimed to give consumers a taste of luxury. This week the brand announced a partnership with John Galliano, a designer known for elaborate couture collections during stints at Dior and Maison Margiela, two luxury houses. It has also collaborated with Stefano Pilati, a former lead designer for Saint Laurent, a glitzy French fashion house. Zara has even made a foray into celebrity styling, dressing Bad Bunny, a Puerto Rican singer, for his Super Bowl halftime show in February.
The shift means Zara is increasingly focused on the affluent parts of the world. Last year two-thirds of its parent’s sales came from Europe (Inditex does not break out Zara’s regional revenue). The brand has reduced the number of its shops by a fifth in the past three years, halving its number of locations in China, where shoppers have been gloomy. And it shut operations in Russia when the war with Ukraine began.
But the remaining shops are larger and posher. From 2022 to 2025 Inditex’s sales per square metre of store footage increased by 46%, says Deutsche Bank. Some shops boast separate boutique-like areas for handbags and shoes, similar to ones found in high-end department stores.
The experience of shopping at Zara is changing, too. Many customers are looking for “something that goes beyond the pure transaction of garments”, says Mr García Maceiras. His stores have introduced self-service checkouts to free staff to act as personal shoppers. Such pampering will please Zara’s shoppers, who are slowly getting used to a touch of glamour. ■
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