Inditex’s (Zara, Pull & Bear, Massimo Dutti, Bershka, Stradivarius, Oysho) business model is based on a revolutionary supply chain that allows the company to deliver new products from design board to its stores in less than 1 month. As a result the company boasts one of the lowest ratios of discounted sales as the product lines are changed frequently and clients must get the merchandise they desire before the sales (most of the models is gone by that time). This is not enough for the ambitious Spaniards who have found yet another way of increasing firm’s benefits.
Lefties is Inditex’s low-cost outlet. It offers its own, low-cost basic products (simple t-shirts, jeans, shoes) and “lefties” from other INDITEX’s brands (with new Lefties brand tag). This strategy lets the company monetize the inventory that would otherwise affect its balance sheet, at the same time addressing lower-income customer segments, thus further expanding company’s market share.
This is yet another example of how innovative business model can create a significant advantage to the companies.
