Zara Boss Buys Madrid Skyscraper for €490 million

Zara Boss Buys Madrid Skyscraper for €490 million

Zara is the flagship brand, and supremely profitable

One of the most iconic skyscrapers making up the modern skyline of Madrid is the Cespa Tower. The richest man in Europe, Amancia Ortega knows something about making smart investments. Ortega founded the global fashion group Inditex, the company behind the shopping brand Zara, and he became the richest man in Europe through his business sense and ability to find a great deal.

This week the Spanish real estate sector saw him scoop up another good deal as he got his hands on the Cespa Tower for €490 million.

The Cespa Tower is one of the four towers that make up the Madrid skyline. Before Ortega bought it the skyscraper used to belong to Khadem al-Qubasi; an oil tycoon from Abu Dhabi.

Ortega has been growing his property portfolio and added the Cespa Tower to it after making arrangements for holding company Pontegadea Immobiliaria to make the purchase through Spanish lender Bankia.

The Cespa Tower is just the latest building in Ortega’s portfolio of impressive real estate in impressive locations. Ortega also owns property on Oxford Street and Mayfair in London, along with prime real estate in Seoul and New York.

Ortega is quite sly in that he actually rents out some of his properties to one of his rivals in H&M. Currently no one knows for sure what he plans to do with the Cespa tower.

The Cuatro Torres complex located in downtown Madrid is made up of a myriad of hotels, office and retail space, along with some private residences. There’s no need for any rental tenants to be worried though. They’re clearly in good hands with a landlord like Ortega.

Spanish Fashion Retailer Zara Leads Global Fashion Stakes

Spanish Fashion Retailer Zara Leads Global Fashion Stakes

The Spanish high street fashion retailer Zara has had one incredible year so far. Profits are up by over 8% compared to last year, fuelled in part by the company in Spain adopting a new business model.

Zara is led by one of the world’s richest men and Spanish entrepreneur Amancio Ortega, founder of the Inditex Group. In the six months following February 1^st the company reported €10.5 billion global sales for profits of €1.3 billion.

What is the secret to their success? Ortega believes that the success comes from their ability to get the latest fashion trends in their stores before any of their rivals can and offering them at competitive prices.

This is the business model that gave Zara the leeway to expand their global reach as they opened up 80 new stores around the world in the first half of the year. Zara also make their clothes closer to the markets that they serve as Zara clothes are typically made in Spain as the cost of living and manufacturing has been low including Portugal and North Africa, rather than the cheaper but more remote areas of China and India. As such they are just able to get their clothe sin the stores faster and easier than competing brands.

The company say that they can have a new design in store within just two weeks of it being drawn up, which shows how much Ortega cares about always being first and keeping up with the fickle world of fashion.

Zara represent a true Spanish success story and they have been enjoying these highs for a while now, but things can always change and experts agree that Zara can’t afford to rest on their laurels.

Making a big profit is actually a risk, according to Business Strategy Professor at the Madrid branch of Boston’s Suffolk University Noel Byrne. He warns that having a lot of profit means that your competition want a piece of the pie.

Byrne suggests that Zara should try to expand into the Asian markets, in particular South Korea and China. These two countries have seen the highest increases in individual spending on clothes since 2004.