By  on August 18, 2009

PARIS — What started at Spain’s Inditex as a side operation to off-load unsold stock from its flagship Zara chain has turned into a growing business, as cost-conscious customers tighten their belts even further.

The opening of two Lefties stores in France earlier this year has marked Inditex’s third foray into international markets after Portugal and Mexico, where the company has built a strong presence thanks to either its geographical or cultural proximity.

Lefties openings have followed the growth of Zara’s stores network and reflect a strong business in France, said a company spokesman.

Like all other Lefties stores, the two French outlets — one in Paris and the other in Bordeaux — previously traded as Zara stores. The Parisian Lefties is located in the Maine-Montparnasse shopping mall. Given its proximity to the busy Montparnasse train station, it competes with several low-cost fashion retailers in the area, with T-shirts starting at 7 euros, or $9.70 at current exchange, and more expensive items like linen-mix blouses priced at 19.99 euros, or $27.87.

While Zara stores are notable for their attractive displays and flawless lighting, Lefties sport a more spartan and utilitarian look, with basic fitting rooms and crowded racks. This extends to a basic white logo on a red background and plastic carrier bags, as opposed to the paper totes normally offered by Zara.

The first Lefties stores opened in Spain in 1995, as Inditex began expanding and needed outlets to sell unsold or damaged apparel without openly linking the outlets to the Zara brand.

Unlike other fashion retailers, which ship old collections to out-of-town outlets, Inditex began converting centrally located Zara stores into the Lefties banner.

The stores also carry own-branded collections of T-shirts, simple cotton dresses and jeans. Inditex says the addition of these items make Lefties “more appealing to the customers.”

But industry observers point out the move also reflects the entrance into the Spanish market of low-cost competitors, such as Primark. The Ireland-based company, best known for selling T-shirts for as low as $5, opened its first Spanish store in May 2006. Operating in Ireland, the U.K. and Germany as well as Spain, Primark rapidly has gained market share due to its ability to source cheaply and to make clothes with simple designs and fabrics.

Since 1995, the number of Lefties’ stores in Spain has ballooned to 60, with a further 15 in Portugal and one in Mexico, before the opening of the two outlets in France. According to Inditex, the number of openings varies each year, since there is no specific expansion plan for the banner, unlike the other brands owned by the company.

The number of openings depends on real estate opportunities, Inditex said, adding it has no new openings planned in France beyond the stores in Paris and Bordeaux.

But there could be a chance it may change its mind, as shoppers in France become more and more cost conscious. According to the French Fashion Institute, apparel sales in France dropped 5 percent last year, and 4 percent in the first quarter of this year, as French consumers reduced discretionary spending in the current economic downturn.

“As Inditex develops in its various geographic markets, it will keep opening new Lefties stores,” said Sanford Bernstein analyst Luca Solca.

To continue reading this article...

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus