2017 proved to be a difficult year for many fashion retailers. Even the Swedish brand H&M posted a fall in profits last year after a summer of aggressive discounting. Somehow though, Inditex, the world’s largest fashion retailer and owner of brands like Zara and Bershka, managed to a steady increase with regards to year-on-year profits. With Zara turning 15 in Singapore last November, we took the opportunity to speak to Simon Naga, Managing Director of Al-Futtaim Group (Inditex Brands), to learn more about their direction for the year.
AM: So we hear you’ve been in the retail business a long time. How’d you get started?
SN: Well I’ve actually been in the retail business since 2001, so that’s just over 17 years now, and most people don’t know this, but I joined by chance. I never thought I’d be working here because my training and background was in marketing. One of the accounts I used to handle was Zara, and one day, after a long meeting with one of the brand managers, he came up to me and asked, “Simon, do you want to join Zara?” At the time I was very young and Zara was still new in the market, so I thought “Why, not?” The rest as they say is history.
AM: You stayed on and climbed through the ranks. What did you like so much about the job?
SN: When I was a store manager in Zara, many people came up to me with very inviting offers. People from banks, etc. I was never really interested in those offers, though. I was focused on Zara because I wanted to be different from those who would jump at any opportunity. I was enjoying the product, dealing with customers, and seeing the fruits of my labour.
AM: You’ve been in Singapore for a while now, how are you enjoying it?
SN: Singapore is a very interesting market and country. As you know, I was based in Dubai before this, and I must say Singapore is very similar to it in the multi-cultural aspect. I do not feel like a stranger here. I did not expect to get along with the team as easily as I did when I first got here. It feels almost like I’ve been here for 10 or 15 years.
AM: What about the differences in your role from when you were in Dubai?
SN: Well, Singapore’s market is not an easy one. It’s sensitive, but it’s full of potential. It gives me something extra to do *laughs*. Here, you really have to think outside the box. If you make a mistake, it ripples and becomes a very big issue. We have to be really critical so we go over our plans very carefully before we execute them. I firmly believe we have a good plan for the market, and we’ll share it with you once it’s confirmed.
AM: Last year was a tough one for fashion retailers. How does Zara constantly strive for improvement?
SN: Look, I’m not going to sugar-coat it. Last year was a very tough year. We had little growth for Zara, but we are working hard to increase this for the coming year. Then main strategy is to increase sales, and cut costs. We are never satisfied. We don’t rest on our laurels because we know there is more to be achieved. Of course, there are times to celebrate, like when we had our 15th anniversary, which is a great accomplishment for the Singapore team. Once that is done however, it’s back to the grind.
AM: Something relatively new for the brand is e-commerce in this region. How’s that going?
SN: E-commerce in general is growing quickly everywhere, and it’s helping us balance our business. It gives us access to new clients who only shop online. These people would have never have shopped in Zara previously because they’re too busy to head down to brick and mortar stores. Now, they can simply go online and make their purchases. Personally I prefer to feel and try the product I’m about to purchase, so I head go to physical stores. There are many people like me too. So like I said, e-commerce brings a balance to our business.
AM: One last question. Many brands are going into partnerships with market places like Aladdin and Lazada. Can we expect something like that in the future for Zara?
SN: Right now, I don’t think it’s something we’re looking at. Under our suite of brands, the leaders have to work with each other in order for the company to be successful. Right now, we’re working on that relationship because it’ll benefit us and the other brands.