For at least a decade, one big question has hovered over Inditex, the world’s largest clothing retailer: what will happen after the departure of Emancio Ortega?
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Ortega (85), the founder of the largest and most esteemed company in Spain, retired as chairman a decade ago, but still continues to reach daily down the Atlantic coast and continues to control a company worth 89 billion euros, thanks to which he is the richest man in the country.
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Chairman Zara Martha Ortega and her husband Carlos Torte
(Photo: Reuters)
The differences between her and her lonely father are most noticeable. He started working at the age of 13 as an in-store assistant, was never interviewed, was rarely caught wearing the company’s clothes and refused to be photographed until shortly before Inditex’s IPO in 2001. In contrast, Martha’s presence at fashion shows, on the French and Italian Riviera and at celebrity weddings has become a must-have item in gossip magazine “Ola!” And others. “She loves fashion, the visual world and combining them,” said a company associate. The daughter Ortega was educated at a boarding school in Switzerland and studied at Regent’s University in London. “She lived it very intensely,” he noted.
After working discreetly at the company for 15 years, Ortega revealed herself to the public in an interview she gave to the Wall Street Journal in August. For the photos, she wore clothes from the Zara and Massimo Dotti collections. “I will always be where the company needs me most,” she said in an interview.
Inditex employees and commentators point out that Ortega devoutly follows her father when it comes to important issues. Like him, she does not have an office at headquarters located in an industrial area in the suburbs of Ah Coronia, but prefers to meet and discuss with the workers in the common spaces. Like her father, she is primarily interested in Zara’s women’s department (Zara represents close to 70% of Inditex’s sales). “It’s a very natural process for a father to bequeath his business to his daughter in this way: it’s clear the time has come and she’s much more involved than we thought,” analyst Anne Criccello from Société Générale commented on the change of leadership. “She was operating under the radar.”
An analyst at Société Générale: “It’s a very natural process for a father to bequeath his business to his daughter in this way: it’s clear the time has come and she’s much more involved than we thought. She was operating under the radar.”
But critics recognize a familiar story: the impatient heir of a family empire washes away a professional who has successfully run the company. In this case it is Pablo Isla, the outgoing chairman under whose tenure Inditex’s market value has jumped six times, and who has been crowned by Harvard Business Review as the best CEO in the world.
“This is a story that characterizes family-owned companies in Spain. There comes a moment when the second generation, who feel underappreciated, convinces themselves that they can run the business better than the professionals,” said Lorenzo Bernaldo de Cyrus, president of the consulting firm Primarket from Madrid.
The company rejects such allegations and insists that Inditex will be run in the style that characterizes more Anglo-American companies, with a new CEO and a management committee that will be given more powers. He is at the level of chairman only while Pablo was also the CEO. “According to her, the company’s share fell after the announcement, not because of Ortega’s appointment but because Isla will be replaced by a” relatively anonymous person “.
President of a consulting firm in Madrid: “This is a story that characterizes family-owned companies in Spain. There comes a moment when the second generation convinces itself that it can manage better than the professionals.”
The new CEO, Oscar Garcia Mesiras, has been working at Inditex only since March and most of his experience is in the field of law. Investors will follow to see if he will meet the goals set by the company to expand digital activities and the issue of sustainability.
Still, Ortega’s rise to the top remains a story of family ties, two weddings that shaped Inditex and the future of Spain’s big company and its leading brand. Just as the announcement of her appointment last week marked a change in leadership, so did her 1984 birth.
When Martha was born, Emancio was still married to his first wife Ruslia Mara, who helped him set up the clothing company that developed into Inditex and created evening dresses and lingerie. According to a biography written about Mara, until Martha’s birth she was not at all aware of the relationship her husband had with Flora Perez, Martha’s mother.
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Today, Perez is married to Amensio and represents on the board the 60% holding held by the family. Two of her brothers have been working in the group for decades and run Zara and Massimo Dotti. Martha’s husband, Carlos Torta, also works at Zara’s online store. Sandra, on the other hand, her older half-sister, has no role in the management of Inditex. After Mara’s death in 2013, Sandra inherited the second largest fortune in Spain after Emancio’s own fortune. According to Forbes magazine, its value stands at 6.3 billion euros compared to 6.7 billion euros for Emancio.
According to the company, Ortega will retain her position at the bazaar even after she takes over as chairman of the board, where her mother and father also serve. “These two things are very consistent,” said a person close to the company. A professional team with a lot of experience working there for many years. “However, others are not convinced.” This company is like an amazing ship, “concluded Bernaldo de Cyrus.” It was transferred in the best possible condition, but the problem is that in a decade we will look at it and understand that it “It’s not Queen Mary anymore.”
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