Spanish “fast-fashion” business: Mango and Zara

It was the early 1980s and a wholesale fashion business was booming round the Balmes street market in Barcelona. Unlike the traditional rug trade, these firms were striving to serve the local shops and boutiques rather than the big chains. One wholesaler was Isak Andic, who arrived from Turkey as a 13-year-old and started selling T-shirts to fellow students at Barcelona’s American High School. Mr. Andic thought he could make more money on the retail side and in 1984 he opened the first Mango store in Pacceo de Gracia. It was another step in the remarkable transformation of Spanish business. Mango is one of two highly successful Spanish clothing firms, which have strutted onto the international stage. The other one, much bigger, is – Zara, owned by the Inditex group. In terms of stores it recently overtook America’s GAP to become the world’s largest fashion retailer. Both firms have become case studies of the post-modern businesses. They were the first who applied a sale-or-return policy; design, marketing and world class information technology and logistics systems instead of using lead times of six months or so to mass-produce clothes that the manufacturers hope will be fashionable. Mango and Zara pioneered “fast fashion”, in which they rush a smaller number of garments into the shops within days when they spot new styles and appetites. Mango’s business model consists of franchises, completely outsourced production in Asia, and sophisticated IT and logistics systems to ensure goods arrive on the shelves in ten days period according to the sale-or-return policy. Mango’s main role is to design garments and to arrange their distribution. Its first overseas expansion was to nearby Portugal in 1992. A quarter of its 6000 strong labor force is employed in its Barcelona headquarters.

  Inditex, based in La Coruna in Galicia, a region in the northwestern Spain, has its own factories in Spain, Portugal and North Africa. It has 3207 shops in 64 countries; about a third are Zara stores, and the rest are Inditex’s other brands, such as Pulland Bear and Massimo Dutti. Inditex has tripled sales in six years to over 8 billion dollars, some 80% of it abroad. But the chief executive Pablo Isla is charged with rolling out new stores at a rate of over 400 a year. The first Zara store has just been opened in Beijing [ˋbeɪˎʤɪn]. Having only 24 outlets in America, the company still has a scope for a huge expansion there. “The 1970s were all about opening in Galicia,” says Mr. Isla. “The 1980s and 1990s were about Spain and Europe. But since 2000 we have been pursuing true internationalization.”

                                                                     (Abridged from “ The Economist ”)

Notes:

rug trade – «массовая торговля» (продажа товаров, рассчитанная на массового потребителя)

sale - or - return policy – политика «продажи или возврата», при которой в случае непродажи товара в течение определенного срока, он возвращается производителю

franchise – разрешение на продажу товара на определенной территории, предоставляемое производителем

sophisticated IT – модернизированная система информационных технологий

lead times – время на освоение новой продукции, на выполнение нового заказа

 

1. Who founded the first Mango store?

2. What does Mango’s business model consist of?

3. What does the term “fast fashion” pioneered by Mango mean?

4. Where are Inditex’s factories situated?

5. Do we have Mango stores in Russia? Have you ever tried their goods? Do you like this brand?

 

Task 2. Read the text and make the presentation of Citigroup company, using questions on p. 20 (task 8).

Citigroup

“Progress informed by the past and inspired by the future” ─

the motto of the company.

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. With 200 years of experience meeting the world's toughest challenges and seizing its greatest opportunities, Citi strives to create the best outcomes for its clients and customers with financial solutions that are simple, creative and responsible.

Proudly serving more than 100 million clients in 40 countries, Citi's Global Consumer Banking (GCB) business is among the largest retail banks in the world. Primarily known as Citibank and strategically centered in the world's top cities, GCB uses its deep footprint to deliver a consistent and enhanced client-centric banking experience. GCB accounted for nearly 40 percent of total deposits and 50 percent of total revenues within Citicorp in 2011.GCB consists of five primary business units - Retail Banking, Citi Branded Cards, CitiMortgage, Citi Commercial Bank and Retail Services - that operate in our four key global regions: North America, Latin America, Europe, Middle East and Africa, and Asia Pacific.

Operations outside the U.S. account for approximately half the total loans, deposits, revenues and net income. The GCB businesses are strong in some of the world's most important growth markets, from China, Malaysia, Korea and India in Asia Pacific, to Poland and Russia in Europe, to Mexico, Brazil, Colombia, Argentina and Panama in Latin America. In Mexico, Citi's Banamex franchise serves more than 20 million people and is the country's largest financial institution as measured by assets and customer-managed resources.

Citi's Securities and Banking (S&B) business offers a wide array of investment and corporate banking services and products for corporations, governments, institutions and investors. Citi Markets provide world-class financial products and solutions across a broad range of asset classes through its underwriting, sales and trading, distribution and research capabilities. Products offered include equities, commodities, credit, futures, foreign exchange, emerging markets, municipals, prime finance. The Citi’s Corporate & Investment Banking franchise is among the world's foremost corporate and investment banks. With its strong local presence in many countries — Citi has been in some markets for more than 100 years — the company helps its clients to raise capital and advise them on important transactions.

Citi Private Bank is a trusted advisor to some of the wealthiest individuals and families throughout the world. The Private Bank has relationships with many globally minded entrepreneurs, investors who expect and demand a highly personalized and consistent level of service. Citi Transaction Services provides cash management, trade and securities services to companies, governments and other institutions in the U.S. and more than 140 countries.

Citi's strategy for the future is clear. The company is completely focused on the key forces driving global growth in financial services: value-added services (like cash management), the flows of world trade, capital and business and the growth of emerging markets. There are three main objectives:

1. Shift the company even more into a client-driven services model, with a business mix of one-third services, one-third institutional and one-third consumer;

2. Capitalize on both our strong presence in emerging markets and our global capabilities to generate growth in every product in every region;

3. Develop Citi into the most client-centric and innovative company in the industry, in order to deepen and extend its competitive advantages.

Economic uncertainty, along with vast changes to the regulatory and competitive landscape, presents broad-reaching implications for the company’s clients and their operations. The Citi helps clients to navigate through this period of volatility with solutions that improve efficiency, maximize the value of capital, protect the integrity of their supply chains and manage risk to help ensure their success in this emerging environment.

                                                                     (http://www.citigroup.com/citi)