One big question has hovered over Inditex, the world's largest clothing retailer, for at least a decade: what happens when Amancio Ortega goes?
The 85-year-old founder of Spain’s biggest and best-respected company stepped down as chair 10 years ago, but comes in every day to its headquarters on the Atlantic coast and still holds a majority stake in the €89 billion giant, making him the country’s richest man.
Now the question has an answer: the Inditex board announced this week that, as of April 1st, Ortega's 37-year-old daughter Marta Ortega will take over as chair of the Zara owner.
The contrast is stark with her reclusive father, who started work as a shop assistant at 13, has never given an interview, rarely wears his company’s products and refused to be photographed until just before Inditex listed in 2001. Marta’s appearances at fashion shows, on the French and Italian Rivieras and at society weddings have become a staple of ¡Hola! and other celebrity magazines.
“She loves fashion, the world of the image and combining them,” says a company insider of Ortega, who was educated at a Swiss boarding school and Regent’s University in London. “It’s something she lives very intensely.”
After working discreetly at the group for 15 years, Ortega announced herself to the public in an interview with the Wall Street Journal in August, wearing clothes from the Zara and Massimo Dutti ranges for an accompanying photo shoot. "I will always be wherever the company needs me most," she said on that occasion.
Inditex staff and analysts say Ortega has followed her father closely where it matters. Like him, she eschews an office in Inditex’s headquarters in an industrial estate in A Coruña’s outskirts, preferring to confer with colleagues at a communal desk. And like him, her primary interest is the Zara Woman collection (Zara accounts for almost 70 per cent of Inditex’s sales).
Natural process
"It's a very natural process for a father to hand over to a daughter in this way: clearly the time has come and she's been a lot more involved in the business than we realised," says Anne Critchlow, an analyst at Société Générale, of Ortega's ascension. "She's been under the radar."
But critics see a familiar tale: an impatient scion of a business dynasty elbows aside a professional who has successfully managed the group - in this instance Pablo Isla, the outgoing executive chair, under whose watch Inditex's market capitalisation multiplied six-fold and who has been acclaimed by Harvard Business Review as the world's top performing chief executive.
"It's the typical story of Spanish family companies – a moment comes when the second generation, which has felt under-appreciated, convinces itself that it can run the business better than the professionals," says Lorenzo Bernaldo de Quirós, president of Freemarket, a Madrid-based consultancy.
The company fiercely rejects any such characterisation, arguing that Inditex will be run more along Anglo-American lines, with a new CEO taking on the leading executive role and its management committee gaining more powers.
“It isn’t really a case of Marta taking over from Pablo,” adds Critchlow. “Marta’s role is not executive, while Pablo was executive chair.” She says the shares fell because of Isla’s replacement by “a relatively unknown person”, not Ortega’s arrival.
Óscar García Maceiras, the new chief executive, has been with Inditex only since March and his principal experience is as a lawyer. It will be him investors will look to as Inditex seeks to increase digitalisation and its operations’ sustainability.
But Ortega’s rise remains a story of family ties, two marriages that shaped Inditex and the futures of Spain’s biggest fortune and its leading brand. Indeed, just as her appointment this week heralds a shake-up of the group, so did her birth in 1984.
When Marta was born, Amancio was still married to his first wife, Rosalía Mera, who helped him start the clothing business that prefigured Inditex, making gowns and lingerie. According to a biography of Mera, until the birth she was unaware of her husband’s relationship with Flora Pérez, Marta’s mother.
Today, Pérez – Amancio's second wife – represents the family's 60 per cent shareholding on the Inditex board and two of her brothers, both of whom have worked for the group for decades, run Zara and Massimo Dutti. Marta's husband, Carlos Torretta, also works for Zara.com.
By contrast, Ortega’s older half-sister, Sandra, plays no role in Inditex’s management, but on Mera’s death in 2013 acceded to Spain’s second largest fortune after Amancio himself – estimated by Forbes at €6.3 billion to his €67 billion.
Board role
The company says Ortega will retain her role at Zara even when she takes her place heading Inditex’s board, on which her mother and father remain.
“These two things are very compatible,” said one person close to the company. He adds that Inditex’s top management – including family members – is “a professional team with a lot of experience who have been there for many years”.
Others are not convinced. “This company is like a fantastic ocean liner,” says Bernaldo de Quirós. “It’s been handed over in the best condition possible. The problem is that in 10 years’ time, you might look at it and see that it isn’t the Queen Mary any more.” – Copyright The Financial Times Limited 2021
