Zara operates typically 4.5 days per week around the clock on full capacity, leaving some flexibility for extra shifts and temporary labor to be added when needed. This
strategy allows Zara
to sell more items at
full price. Zara’s total
cost is minimized
because
merchandise that is
marked down is
reduced as compared to its competitors. Zara gets 85 percent of the full price on its clothes, while the industry average is 60 to 70 percent. Unsold items account for less than 10 percent of its stock, compared with an industry average of 17 to 20 percent.
Zara's vertically integrated supply chain, enables mass production under push
control,
leading to well-managed inventories, lower markdowns, higher profitability, and value
creation for shareholders in
the short and long term.
Zara relies heavily on sophisticated fabric sourcing, cutting, and sewing facilities nearer to its design headquarters in Spain.