Strategy: Zara has completely altered daily life for this sleepy Spanish town. Here's what residents think about it.

Zara's flagship store is in La Coruña.

Zara has been based in Galicia, on the northwest coast of Spain, since 1975. But what started out as just one store has grown into an enormous, multi-national business, changing life for the nearby city where many of Zara's employees have chosen to live.

  • Zara's headquarters are located in Arteixo, a small town on the northwest coast of Spain.
  • More than 5,000 employees across various departments including design, photography, sales, and e-commerce work here. The site is also home to Zara's largest distribution center, which is responsible for shipping the retailer's clothing to 96 different countries around the world.
  • The presence of these sprawling headquarters has had a profound impact on the nearby city of La Coruña, where many of Zara's employees choose to live.

Zara may have grown up, but it never really left home.

The clothing chain has been based in Galicia, on the northwest coast of Spain, since 1975. But what started out as just one store has grown into an enormous, multi-national business that is considered to be the largest fashion retailer on the planet, turning out over $30 billion in sales a year.

Despite this, Zara has always stayed true to its roots, and its billionaire founder, Amancio Ortega, has continued to expand its global headquarters in Galicia to accommodate its growth.

To do so, the company has brought in thousands of employees from different parts of the world to work on its design, photography, sales, and e-commerce strategy. This has had a dramatic impact on the culture of the nearby city of La Coruña, where many of these employees choose to live.

The locals call it the "Impacto Inditex," and it's felt in all areas of the city. Whether it be the fashionistas that roam the streets, dipping in and out of its trendy stores, cafes, and bars, or the disgruntled residents who say they face rising living costs, it's clear that Inditex is having a profound impact on life in La Coruña, for better or worse.

We visited the city in August to see how much it has changed with the rise of Zara:

Amancio Ortega opened the first Zara store in La Coruña in 1975. He originally named his store Zorba after the 1964 film "Zorba the Greek," but changed it after he discovered a nearby bar had the same name. Ortega reshuffled the letters to come up with Zara.

The first store still exists in La Coruña today, but there is very little distinguishing it from Zara stores you might find anywhere in the world.

Ortega opened Zara's headquarters in the nearby town of Arteixo in 1977. This is still its home today.

Arteixo, a small town with a population of about 30,000, is a roughly 20-minute drive from La Coruña, or A Coruña, as it's known in Galician.

Over the course of two decades, the brand expanded dramatically, opening stores across Spain and in different countries around the world. In 1985, Ortega incorporated the chain into a holding company called Inditex.

Today, Inditex's headquarters occupy a sprawling, 860,000-square-foot space in Arteixo.

The headquarters is also home to some of Zara's factories and a distribution center where clothes are boxed and loaded onto trucks to be sent to 96 countries around the world.

The distribution center has had a significant effect on La Coruña's exports business.

Though La Coruña is the 18th-largest city in Spain, the city and its province accounted for 4% of Spain's total exports in 2017, according to Economy Ministry data reported by Bloomberg.

This is more than any other region in Spain with the exception of Madrid, Barcelona, and Valencia.

Inditex is also the largest employer in the region. More than 5,000 people work at its headquarters across various divisions including design, e-commerce, and sales.

Residents say that this has had a profound impact on the city of La Coruña, where many of these employees choose to live, shop, and spend money. With a population of almost 250,000 people, La Coruña is significantly larger than Arteixo.

"Inditex is the big company that moves everything here," Adolfo Lopez, 58, a business owner who has lived in the city all his life, told Business Insider.

Lopez explained that the sheer size of the business means that almost everyone in the city will know someone who works either directly or indirectly for Inditex.

If you don't know someone who works for Inditex, you are likely to know someone who works for a business that works for the company, he said.

Designers, models, and photographers come from all parts of the world to work here.

Local taxi driver Daniel Chans, 31, said the mix of different cultures has had a positive impact on the city.

"In the past, it was very rare to see an Asian or a black person going out together," he said. "Now there is almost no racism."

It has also made the city more cosmopolitan. Residents say Inditex employees like to gather in one of the city's busiest streets, Calle de Estrella.

"The city has modernized a lot; restaurants that you might find in Barcelona or in Madrid have opened here," said Tamara Valencia, 29, a sales assistant at a boutique store in La Coruña.

"When you would go out at night years ago you would see no one. Now you find people on the street that you wouldn't have seen before."

When we explored Calle de Estrella on a Monday evening, the restaurants were brimming with people.

There are several stores along the street that are clearly targeted to a more fashion-conscious customer.

Valencia explained that there have been a lot of changes in her lifetime, and a whole host of trendy stores have cropped up.

It's put the city on the map as a fashion destination.

"People started changing their way of dressing, and as the business started growing, people from other parts of Spain started noticing that people here were dressing well," she said.

It doesn't take long to stumble across an Inditex-owned store in La Coruña.

Within 400 feet of our hotel, there are six: Zara, Pull & Bear, Bershka, Oysho, Uterqüe, and Massimo Dutti. It's clear that Inditex is the dominant force in retail here.

While many residents are happy that the city has evolved, it does have its consequences.

The influx of employees has increased demand for rental properties in the center of town, driving prices up and making it more difficult for locals to live in the area.

"When I came here a year and a half ago and I was looking for an apartment, I found it super complicated to find a one-bedroom," Sara Canedo, 25, a sales assistant at the Almacen concept store in the old town, told Business Insider.

"The real estate agents said that the majority of these apartments were being rented by people from Inditex."

According to real-estate agency Engel & Völkers, average rental prices have increased by 15% in the last two to three years.

"[Inditex] has caused a big increase in the rental prices due to the number of employees coming from other cities or countries that have purchasing power," Patricia Vigiola, a rental agent at Engel & Völkers in La Coruña wrote in an email to Business Insider.

She added: "The request is always the city center."

Employees choose to live in La Coruña over Artexio because it is a more vibrant city.

"Arteixo is a rural area without any residential, cultural or social attraction. La Coruña is just 20 minutes away by car and is where you have all the services for your daily life," Vigiola said.

Despite these rental increases, most residents seem to view the business and its founder favorably.

This is likely because of the investments he has made into the city.

"Half of the city lives thanks to him," Lopez said of Ortega.

According to El País, Ortega has donated money towards building schools and to benefit organizations that work with the region's homeless and elderly population.

Ortega has stepped down as chairman but owns 59% of Inditex and is currently the fifth-richest person in the world.

Ortega is known for leading an extremely private life and seldom speaks to the press. He is said to live in a discreet apartment building in La Coruña.

The residents we spoke to say they have never come into contact with him, and it's likely that most locals haven't. However, it's a face that everyone knows.

Source: Pluse ng

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