Marta Ortega, dressed in a black tailored suit and wearing a Cartier watch, deftly navigated through the crowd at the event, shaking hands and engaging in cheek-to-cheek greetings. Her short blonde hair swayed gently as she nodded frequently, her entire demeanor animated by the vibrant atmosphere. The party, held in October 2025, was located in a mid-century style building on Paris's Champs-Élysées, just steps away from the opulent flagship store of Louis Vuitton. The guest list glittered with stars, including supermodels Naomi Campbell and Linda Evangelista. Throughout the evening, waiters circulated, offering shrimp prepared with basil pesto and roasted tomatoes. Christopher Michael, host of the industry podcast "Whats Contemporary Now?", remarked, "In the fashion world, this is the place to be tonight – everywhere you look, there are important figures." The host of this grand affair was not a traditional luxury house like Louis Vuitton or Dior, but Inditex's flagship brand Zara and its 41-year-old Chairman, Ortega – who inherited the $116 billion fortune amassed by the retail empire co-founded by her father, Amancio. This party celebrating Zara's 50th anniversary was another move by Ortega to position the brand towards high fashion, aiming to shed the "fast fashion" label it helped pioneer – an industry often associated with cheap goods, sweatshops in developing countries, and a massive carbon footprint.
One of the driving forces behind Ortega's transformation is the rise of Chinese companies like Shein and Temu in the global apparel market, valued at over $1.8 trillion. In an era of severe clothing oversupply, they have captured young, budget-conscious consumers with ultra-low prices, continuously squeezing the market share of traditional chains like Zara, H&M, Mango, and Gap. Meanwhile, high-end fashion brands have pushed prices to "sky-high" levels, drawing controversy over "greedflation." Ortega is attempting to find a blue ocean between these two opposing currents: by selling more expensive products in more upscale stores. However, affected by tariff policies and a decline in non-essential consumer spending, sales growth at the world's largest listed fashion retailer has stalled, making this ambitious premiumization push the first major test since Ortega took the helm three years ago. Inditex's revenue grew by a mere 1.6% in the first half of the year, marking the company's weakest half-year performance since its IPO nearly 25 years ago (excluding the 37% plunge during the peak of the pandemic in 2020). While operating expense growth has already outpaced revenue, what worries investors more is the current lack of a clear sales growth engine.
"We are clearly at a critical inflection point," said Simon Irwin, who previously worked at Credit Suisse International, has tracked the company since its 2001 IPO, and now runs a consulting firm. "Many factors that previously drove explosive growth in sales per square foot now seem to be in the past. The path forward, in my view, is unclear... Finding new sources of growth is quite a formidable challenge." Despite this, analysts still regard Inditex as an industry benchmark, acknowledging its reasonable dividend yield and robust balance sheet. As one of the few leading European global corporations, alongside companies like Airbus SE, LVMH, and ASML Holding NV, this retailer boasts annual revenue of nearly €40 billion (approximately $46.3 billion) and net profit of around €6 billion, giving it substantial financial strength and strategic flexibility. However, concerns about its growth stagnation are mounting. Based on conversations with more than ten current and former employees, suppliers, industry experts, and investors, the group is struggling to balance its nearly 50-year-old, highly effective fast-fashion model with the brand premiumization vision proposed by Ortega in the face of a new market landscape.
In a 2025 interview with the Spanish newspaper El Pais, the executive stated that the group's goal is "not to sell more, but to sell better, achieving healthy growth." Ortega herself declined to be interviewed for this article, and Inditex declined to comment. "The reality is, it remains fundamentally a scale-driven company," pointed out Dana Thomas, author of "Fashionopolis: the Price of Fast Fashion and the Future of Clothes." "As long as it has over 5,000 stores worldwide, plus online operations, still mass-producing identical items and pushing them out to us on a massive scale, as long as it remains a product of mass production, mass sales, and mass marketing, it will never be 'premium exclusive,' and it will never be 'green'."
The Zara showroom at Inditex headquarters Ortega and Óscar García Maceiras, the 50-year-old CEO of Inditex who took office at the end of 2021, represent a generational shift within the group. They are seen as a synergistic duo: the professionally trained lawyer García Maceiras focuses on the specifics of daily operations, while Ortega excels at networking and concentrating on brand image building. "Her deep involvement in product and marketing is clearly quite rare," Irwin commented. "I can't think of another company's chairman – especially a non-executive chairman – who gets so deeply involved in business details." Initially, the duo successfully steered the strong post-pandemic demand rebound and continued Inditex's core strategy: persistently heavy investment in logistics and upgrading the store network – opening fewer, but larger, stores in premium retail locations.
Simultaneously, Zara began exploring higher-priced items and launching more limited editions. According to data from Retviews, owned by market intelligence firm Lectra, the average price of Zara products in Europe has increased by 22% over the past five years, and surged by 70% in the US market. Between 2021 and 2024, Inditex's revenue grew by approximately 40%, its stock price nearly doubled, and net profit reached a record €5.87 billion for the third consecutive year, exceeding the combined profits of Shein, Sweden's H&M, and Uniqlo's parent company Fast Retailing. However, as the pent-up demand from the pandemic was exhausted, sales growth began to cool. In the first half of 2025, Inditex's performance was pressured by a weak US dollar. Sales growth for Zara (including Zara Home and the low-cost brand Lefties), which contributes over two-thirds of the group's revenue, was a mere 0.8%.
"Inditex is not a value stock; it's a growth stock," said Marion Cohet-Boucheron, a portfolio manager at French asset manager Financière de l'Échiquier, which holds shares in the company. "Its sales need to maintain mid-to-high single-digit growth." After years of exceeding high industry expectations, the company's slowdown caught investors off guard, leading to its largest single-day stock price drop in over five years in March 2025. Although a sales recovery at the start of the third quarter prompted a slight rebound, the stock was still down 2% year-to-date for 2025. "They must continue to drive productivity improvements, but it's certainly not easy," Irwin stated. At the group's headquarters in Arteixo, northwestern Spain, the growth slowdown has caused internal unease.
The company subsequently initiated a management reshuffle: Ignacio Fernández Fernández, former CFO and a key confidant of the controlling family, was moved to the newly created position of Chief Corporate Affairs Officer. This move effectively grants greater authority to this company veteran, who rose through the ranks during the era of the 89-year-old co-founder Amancio Ortega, to oversee daily operations. The family currently holds approximately 60% of Inditex's shares. In 1975, Amancio and his then-wife Rosalia Mera founded Zara with the original intention of providing fashionable and affordable clothing for the masses. In 1989, when the brand opened its first store in New York, the "Big Apple," a New York Times journalist coined the term "fast fashion" to describe this business model catering to consumers who "change their clothes as often as they change their lipstick color."
Benefiting from Inditex's aggressive expansion and public listing in the early 2000s, Zara entered a period of rapid growth. It not only became a national hallmark of Spain, but its business model was also adopted as a case study by top global business schools. Although the group later expanded its brand portfolio with Bershka, Massimo Dutti, Oysho, Pull&Bear, and Stradivarius, Zara remains its unshakable cornerstone. Zara's winning formula lies in its accurate trend spotting, rapid design adaptation, and ability to get new items into stores extremely quickly –彻底颠覆了传统的季节性周期. This is supported by a precisely operating supply chain and logistics network capable of weekly restocking and new arrivals, constantly attracting customers back for "new items." This model defined a generation of retail, not only propelling Zara to global giant status but also setting the industry benchmark for all competitors.
Around 2015, public perception of Zara began to shift: it was both an extremely successful retailer and a symbol of the environmental and ethical dilemmas of the fast fashion industry. Although its efficient model was still praised, it increasingly clashed with growing societal concerns about pollution, textile waste, greenhouse gas emissions, and the working conditions of garment workers in developing countries. This placed Zara in a nearly unsolvable contradiction: as the pioneer of the fast fashion model, it began to distance itself from the industry it helped shape, a trend that accelerated further under Marta Ortega's leadership. According to company insiders, Ortega, based in her office deep within the Zara womenswear department, personally drives the brand's upward move: participating in sample fittings, chairing meetings, inviting celebrities, and meticulously crafting the brand image.
Unlike her famously low-profile father, she has cultivated a more public persona, carefully weaving a network of relationships and converting the accumulated cultural capital into access to top-tier events and exhibitions. In 2018, she launched Zara's first "SRPLS" limited collection, released via online channels and weekly in-store arrivals. Her second collection even debuted at Paris Fashion Week, held in venues typically used by brands like Balenciaga and Givenchy, a clear public statement of its high-end ambitions. Subsequently, premium lines like "Zara Atelier" were launched, and such collaborations have become regular features on the brand's website and app. "Many styles in these collections are essentially brand image tests," said Pau Almar, a former Inditex employee and current COO of Russian fast-fashion brand Limé. "It's a mindset shift: the money is spent not on a true sales collection, but on an advertising campaign – because these products are not meant to be sold in large quantities."
These limited collections often hire top photographers, stylists, and creative directors who typically work with luxury brands. While Zara does not do traditional advertising, it invests heavily in image building: sophisticated editorial shoots, cinematic commercials, and top models commanding daily rates of up to €50,000 (even exceeding some luxury brands). Jason Duzansky, a creative director who previously worked for Chanel and Louis Vuitton and now works in the fitting department at Inditex headquarters, expressed surprise at the creative freedom he was given while shooting a campaign for Inditex in a New York studio in 2025. The three-day shoot employed famed photographer Steven Meisel and 50 fashion models, resulting in a two-minute short film. Duzansky said Ortega herself participated in selecting the soundtrack, choosing Donna Summer's psychedelic classic "I Feel Love."
Mario Sorrenti, a photographer and friend of Ortega who worked on Zara's latest 50th-anniversary collection, recalled that the project's budget seemed almost limitless: "They were not sparing any expense." Zara is also investing heavily in renovating its flagship stores. A significant portion of Inditex's annual €1.8 billion capital expenditure is dedicated to rolling out a new store design, already implemented in locations like Madrid, Las Vegas, and Shanghai. On November 25, 2025, Zara opened a new flagship store on Barcelona's famous Avinguda Diagonal, designed by Belgian architect Vincent Van Duysen. This new store concept was unveiled three years earlier at Plaza de España in Madrid – a four-level, 7,700-square-meter fashion temple featuring curved partitions and floating shelves creating soft geometric spaces. The design has evolved, with the latest version located on another upscale Madrid shopping street, Calle Serrano, and首次引入 "El Apartamento" area – a curated, home-like experience space combining fashion, furniture, and a café.
However, it remains uncertain how much momentum Zara's premiumization push will have once external tailwinds fade; Inditex also still needs to find a balance between its mass-production model and its environmental goals. In 2024, Inditex's greenhouse gas emissions amounted to nearly 10 million tonnes of CO2 equivalent. To maintain its refined inventory management and rapid turnover model, the company's reliance on air freight increased, leading to a 10% year-on-year rise in transportation-related emissions. Ortega has consistently refused to accept the fast-fashion label for the group, arguing that the company produces on demand, minimizing inventory and unsold goods. But Ken Pucker, a professor at Tufts University's Fletcher School of Law and Diplomacy and former COO of Timberland's apparel business, believes this claim is "somewhat misleading." "In reality, the pursuit of 'fast' and 'new' by brands like Zara is more about stimulating demand than responding to it," he pointed out.
In the view of industry observers, Inditex's premiumization transformation is merely a performance of "wanting to have its cake and eat it too": wanting to elevate its status without fundamentally altering its production model. Thomas, author of "Fashionopolis," calls it "cosmetic adjustment," far from systemic change. But the guests at the October 2025 Paris party seemed largely unconcerned with these critiques. The event displayed works by 50 renowned creators, including clothing, handbags, and accessories, featuring items like a bright pink surfboard designed by Pierpaolo Piccioli and a mirror designed by singer Robbie Williams. As the night deepened, mini desserts were served, guests took photos for souvenirs, and Ortega continued to circulate, assisting attendees with reserving exhibited pieces – a subtle reminder that even during celebrations, the wheels of commerce never stop turning.
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