Amancio Ortega – a Slumdog Millionaire: The History of Success
February 3rd, 2014 by Alisa Sava
Amancio Ortega is a Spanish real “slumdog millionaire” he was born in a poor Spanish family, started his business in 37 years and became one of the wealthiest men on the planet. In 2013, Forbes named Amancio Ortega the third richest man in the world.
Many people have never heard about Amancio Ortega, but almost everybody knows the name of the famous fashion giant “Zara.” Amancio Ortega is a person who stands behind this brand.
He is so shy that before his first public appearance in 2011, nobody outside his close circle had ever seen him. The same secrecy was maintained during his first marriage. He never granted interviews and photo sessions with his family.
Ortega’s life is a truly inspiring story. He was born in poverty. His father was a railroad worker and his mother worked as a maid. Ortega started his career as a delivery boy in one textile firm. In 1972 he founded “Confecciones Goa” which sold bath robes made by the local women.
By 16, Ortega had concluded that the real money could be made only when you give the customers exactly what they wanted rather than buying something and hoping it would sell.
Ortega worked hard and learnt the basics of business until some day he found success: in 1975 Amancio Ortega with his wife co-founded “Zara.” He named it Zara, because his preferred name, Zorba, was already taken. Ortega started his business in the ideal environment: Galicia. There were few job opportunities, and all the men worked at sea leaving their women along. Ortega began organizing women into sewing cooperatives:
“The women would do anything for a little money, and they were really good at sewing,” says Xabier Blanco, who co-wrote a book called “Amancio Ortega: From Zero to Zara.”
Amancio Ortega ran design, his brother Antonio was in charge of commercial side and his sister Josefa was a bookkeeper.The idea of the business was quite simple: buy the cheapest materials and make clothes that almost everybody could afford. Thus, one of the first in the textile market, the future billionaire decided to bet on accessibility. And he succeeded.
Today, Amancio Ortega is the owner of huge Inditex Group made up of almost a hundred companies dealing with textile design. Inditex has more than 6,200 stores worldwide and owns the brands Zara, Zara Home, Massimo Dutti, Oysho, Pull and Bear, Stradivarius, Bershka, Lefties, etc. Thus, Ortega has built his empire on two principal rules: give customers what they want and do this faster than anybody else.
“Very few companies can challenge Inditex at this time. The company is in a race with themselves rather than anything else,” says Christodoulos Chaviaras, a retail analyst at Barclays Capital in London.
Amancio Ortega is a workaholic: he likes to do his work himself and rarely takes vacations. Money never shifted his focus and in spite of being the owner of billions dollars, Ortega prefers to dress casually and doesn’t pay to much attention to his appearance.
In 2009 Ortega was awarded the Grand Cross of the Order of Civil Merit and in 2011 he announced his retirement from the chairman position in Inditex. Today, Ortega focuses on the real estate, gas, tourism and banks. He also owns a horse-jumping circuit and a stake in a soccer league.
Where Does Zara’s Owner Live?
Amancio Ortega lives with his wife in rainy A Coruña, Spain, in the elite district “barrio de Zalaeta.” He owns a duplex apartment with beautiful views of the Orzán beach. This district is usually called “Zaraeta” because there are many Zara workers living here.
Amancio also owns a luxurious private residence in Sanxenxo, the building of XVII century with a small farm, garden, swimming pool and horse barn. This house is the favorite place of Ortega’s family. After the retirement, Ortega spends almost all his time in this residence.
Amancio Ortega’s Real Estate
As mentioned before, real estate is another passion of Amancio Ortega. Ortega owns a luxury apartment complex in Miami and has real estate holdings in Madrid, Lisbon, Paris and London.
The company Pontegadea Invesiones SL is Ortega’s real-estate adviser, through which he signs the deals. After the retirement, Amancio Ortega has bought a lot of new properties and, probably, his real-estate aspiration will continue to grow further. Below, we present some of newly-bought properties owned by the billionaire.
New York City’s Meatpacking District for $94 Million
Amancio Ortega bought this 56,000-square-foot office and retail building located on 414 West 14th Street in early December, 2013. According to data from CoStar, the building space is currently leased to tenants, among them, the clothing retailer Patagonia, Levi’s, etc.
Apple Store Building in Valencia, Span, for $31,2 Million
In January, 2014 Amancio Ortega purchased the building that houses the Apple retail store. It is located in the Calle Colón, Valencia. As reported by Valencia Plaza, the property was purchased for $31,2 million and will generate five percent profit annually.
The deal provides an option for Apple to purchase the building after the current lease contract expires.
Apple Store Building in Barcelona for $60,1 Million
This year Amancio Ortega has bought another emblematic building in Barcelona’s Plaza Cataluña.
This sale was finalized for $60,1 million with a 15-year Apple’s lease of the ground floor store and mezzanine areas.
The Carrousel du Louvre Shopping Mall, Paris
Ortega’s passion in owning buildings is topped with the Paris Carrousel du Louvre shopping center. And guess what is located on the ground floor? Right, another Apple store. Probably, the Apple choice is not accidental.
Apple is a perfect tenant: it maintains the building to the highest standards, pays rent on time and guaranties a continued occupancy.
Office Building in the Heart of London for £410m
In January 2014, Amancio Ortega purchased an office building in London’s West End. Now, Ortega thinks about converting the building to luxury apartments or a hotel with the first grounds left for retail.
“This is one of the most special locations on earth,” notes Dan Fasulo, the managing director of Real Capital Analytics.
It is really true, the building is situated in the world’s most expensive property district.
Torre Picasso, a 43-story Skyscraper, Madrid
Being an iconic building of Madrid, Torre Picasso was sold for $536 in December 2011. Amancio Ortega purchased it from the billionaire Esther Koplowitz.
Epic Residences and Hotel in Miami
In 2009 Amancio Ortega purchased the EPIC Residences & Hotel, combined a luxury high-rise condo and five-star hotel. The building has a perfect location and is expected to generate a high return:
“Downtown Miami is poised to become the core of everything exciting in South Florida. With its waterfront location in the heart of downtown, EPIC will be at the center of it all,” said Diego Lowenstein, the chief executive officer of Miami Beach.
Thus, the strategy of the world’s third-richest personis clear and direct: prime location and long-term rent contracts that can be guaranteed by high-tech renters such as Google and Apple. Amancio Ortega knows his assets well and believes in real-estate (commercial, industrial or residential) as the area to concentrate in.
Today, he is consistently growing his fortune principally due to the revenue from leases. And he is not going to stop now. The new properties in Rome, Chicago and Mexico City are in the list of Ortega’s nearest acquisitions.