Inditex is a Spanish clothing company founded in 1975. It is the largest fashion group in the globe and owns over 7000 stores in 91 markets around the world. The company’s most famous and highest selling chain is Zara, but it also owns other chains such as Oysho, Bershka, Massimo Dutti, and Zara Home. Inditex implements a unique model for business that is founded on customer feedback. It competes with local retailers in a majority of its markets. Its closest comparable competitors are considered to be H&M, The Gap, and Benetton. All competitors have a narrow vertical scope compared to Zara, which owns most of its stores and production. H&M and The Gap which were the largest apparel retailers worldwide, ahead of Inditex, owned most of the stores but outsourced majority of its production.

The three competitors were ranked differently in product space from Inditex’s chains. The Gap had the highest net operating revenue at 15,559 almost 5 times more than Inditex. But Gap registered a loss of 9 million Euros. H&M made the most profits with an operation revenue of 4,269 million Euros and a net income of 410 million Euros. Benetton had the lowest operating revenue of 2,098 million Euros and a net income of 148 million Euros. Gap had the lowest operating margin with 2.43%, followed by Benetton with 13.6%, and H&M 13.8%, Inditex recorded the highest with 21.6%. When it comes to net margin, Inditex has the highest net margin with 21.75% followed by H&M with 19.86%, Benetton with 12.44%, and again Gap had the lowest with 2.4%. Zara has a working capital of 20 million Euros as opposed to H&M’s 1035 million Euro’s.

This is because H&M invests more in fixed assets. Inditex has 1228 million Euro in plant, property, and equipment compared to 661 million Euros of H&M. Zara and H&M have similar prices, though asset turnover of H&M may be higher. Zara has a greater sale to current assets ratio. This suggests that Zara has a more mobile revenue and more efficient in using assets to generate revenue.