ITALY FINALLY GETS A ZARA
Byline: Courtney Colavita
MILAN — It may be fast fashion, but the road to Italy was slow and long for Spanish retailer Zara.
After years of false starts and a failed joint venture with Italian retailer Benetton, the Inditex Group this month finally opened its first Zara Italian flagship, here on Corso Vittorio Emanuele, and the response was overwhelming. This type of retailing — huge store, trendy styles, disposable prices — is novel in Italy.
Thousands of Italians swarmed the sprawling four-level store, gathering clothes as though they had had one too many double espressos.
Words like bellissimo, gigantesco and fantastico could be heard from almost every customer passing through the store’s grand marble and mosaic entrance.
“This is just incredible. The prices and the quality are actually better than I expected,” said Vanessa Olmi, 31, of Milan, who snatched up a pink corduroy pantsuit and a pinstriped shirt.
The 32,290-square-foot store, now Zara’s largest in Europe, is one-stop family shopping with women’s, men’s, children’s, accessories and beauty. There’s also a corner dedicated to Inditex’s innerwear brand, Oysho.
Like all of Zara’s 520 worldwide stores, a team of in-house architects designed the Milan megastore, which plays with curves and circles and combines natural and soft recessed lighting. The design team preserved the space’s original grand marble staircase, crystal chandelier and mosaic walls — creating a mood that meshes modern lines with antique beauty.
Although Italians could be one of the world’s most discriminating and label-conscious consumer groups, customers overall were amazed with the store’s enormity, trend-driven selection and strong price-to-quality ratio.
“This is an economic alternative to buying designer labels,” said Cristina Pazzi, 32, of Milan. “The clothes are really of the moment and the quality is great for the price — even if you only wear something for one season, you don’t mind, because you didn’t spend a fortune on it.”
For Italians who otherwise would have to travel to Nice, Paris or London for a Zara fix, its arrival is long overdue. Anticipation had been building since 1997, when Inditex formed a joint venture with Benetton to help bring the chain to the Italian market. But a series of real estate challenges and years of inertia led Inditex to sever its relationship with Benetton.
“Just like in all traditional marriages, the objective is to have children,” said Ramon Renon, international director of development at Inditex. “In our case, that meant stores, and after a year-and-a-half, we canceled our agreement [with Benetton] because we never had any children.”
Following the end of its project with Benetton, Zara management methodically approached its entrance into what turned out to be one of the trickiest markets for the group. In Italy, and above all in Milan, Zara must compete not only with the best of designerwear, but must also go head-to-head with Italian institutions like Benetton, Sisley and Stefanel.
“I really believe our ability to respond to the market’s demands and deliver new merchandise every two weeks will make us a success here,” said Renon. “In a country that is so competitive like Italy, and where its people are so fashion savvy, we wanted to be totally prepared and we wanted to come in with a local partner.”
In October, Inditex signed a joint venture with Italian commercial and real estate giant Percassi Group. Inditex controls 51 percent of the new company, Zara Italia, and Percassi the remainder. However, Percassi has the option to climb to 50 percent ownership in the next five years if it reaches goals set by Zara.
Based in the northern Italian city of Bergamo, Percassi has been a dominant force in the Italian real estate and retail licensing market for the past 30 years. Its retail investments include Mandarina Duck, Marina Rinaldi, Sisley and Playlife. Today, it’s Italy’s largest distributor of United Colours of Benetton. But the group’s chief executive officer isn’t concerned about any conflict of interest, given the relationship with Benetton.
“I’m with two beautiful women — it’s the maximum,” said Antonio Percassi, president and ceo of the group bearing his name.
Inditex’s directive to find a large retail space in the heart of Milan might have been a challenge for less-connected commercial agencies, but Percassi shuffled around its retail assets and converted its former Swatch retail space into Zara.
Percassi and Renon would not put a price tag on the Milan project, but said that an average Zara store requires an investment of $4.4 million. (Dollar figures are converted from the euro at current exchange rates). The two said they anticipate single-store sales to reach $11.4 million to $17.6 million and expect to break even by yearend.
Now that Zara has finally landed in Italy, Renon said that the company must capitalize on the hype and continue to expand. Renon told WWD that Zara should open two to three more stores in Italy by the end of the year and that the next logical city would be Rome.
“It’s not easy to find an 11,000- or 16,000-square-foot space in an antique city,” he said. “But along with Percassi, we’ll do it.”