Retail Brands Case Study Example | Topics and Well Written Essays - 2000 words

Retail Brands - Case Study Example It is a leading retailer in food, clothing and home-ware and financial services, in operation since 1884. Zara is a leading Spanish Flagship Chain Store that deals in Women and Men's clothing. It opened its first store in 1975 and since then has taken retail fashion by storm. It is one of the largest brands, by the Inditex Fashion Retail Group, that has 723 stores in 56 countries making sales of Euro 3.8 billion (India Supply Chain Council, 2006). Zara's fashion is based on imitation; it copies designs from the catwalk and other spots and brings them to their customers at low prices in as little as a couple of weeks. Marks and Spencer's average customer is mainly women aged between 35 and 54. They are wealthy and have an active lifestyle. They are also family-oriented and are open to trying new things (MMC Consultancy, 2004). Zara's average customer is aged between 15 to 30 years of age. They are fashion-focused and have a desire for high-end fashion. The average customer is an urban woman who is not necessarily exceptionally wealthy and looks for trendy clothes in reasonable prices. (Nidasio G., 2007) It was assumed that Marks and Spencer would do better with 70% of the stores being refurbished. Their strategy to increase market share for the past three years has been the same. This year, and the last, they still managed to come back at a higher position (after their big downfall till 2004). It is one of the few retail stores in the UK that managed to increase their market share in 2007, with high interest rates and low consumer confidence. Zara's position in the retail market has always been a leading one. This year was no different. It increased profits by expanding to into more territories. It hold a stronger position in the fashion retail industry than many other foreign labels. Sales, Profit and Market Share Marks and Spencer's sales turnover, for the year ended 31 March 2007, was Pound 8,588.1 million. The sales breakdown for 2006/2007 was as follows: Clothing was at Pound 3,570,900 and Home was at Pound 431,900 (with the rest accounting for Food and International slaes). The profit before tax was Pound 1,007 million, which was a 4.3% increase. According to Stuart Rose, Chief Executive of M&S, sales fell by 2.2% by the end of December, during Christmas season. The market share for women wear fell during Christmas time also. However, the sales in UK rose by 9.7%. The market share held by clothing and footwear in 2007 was at 11.1%. (TNS WorldPanel Fashion,Your M&S, 2008). Zara, on the other hand, has a very high product turnover. It makes more than 11,000 products annually. The annual report of Zara (Inditex) for the fiscal year 2006 covers all activities from February 2006 to January 2007. Zara opened 138 new stores during the past year, increasing its selling area by 15%. The sales were an increase of 21% at Euro 5,352 million. It earned net profit of Euro 1 billion (Safe G., 2007) an increase of 25%, was in contrast to last year's profit. The sales in Europe, with exception to Spain, were 40.6% of the total (Inditex Annual Report, 2007). Store Design Zara's typical store is a principally white, modern and spacious store; it is bright and has