The fashion industry has undergone dramatic changes over the years with waves upon waves of new trends aggressively disrupting the industry’s landscape in a profound way. In recent years, the “fast fashion” trend (describing the fast pace through which the latest designs are translated into affordable clothing) stands out as one of the greatest disruptors of the fashion business in the 21st century.
What is most surprising however, is that not only has fast fashion retailers become the dominant leaders of the fashion industry as a whole, but they are also more often than not family-owned businesses. In fact, family businesses make up the entire list of the world’s largest apparel retailers in the world, highlighting how the fast decision-making process that is unique to family businesses can be leveraged to revolutionize and dominate industries.
Take a dive into the list of the top 5 largest fashion & clothing retailers in the world (ranked by revenue, 2016):
Country: South Korea
Revenue: $11.9 billion
Owning Family: Lee
Cheil industries, a South Korea-based fast fashion company, was founded in 1954 as a textile producing company but later ventured into fashion in 1989. The 1980s saw the company diversify into chemicals and later into the electronics materials business in the 1990s. However, despite diversifying into other unrelated product lines, Cheil’s fashion unit is today among one of the leading fashion companies in the world. The company pioneered the adoption of the Just-in-Time [JIT] inventory system, a practice that considerably reduces the time involved in the clothing production process. Today, the company manages several fashion brands present across Asia, including Bean Pole International, 10 Corso Como, and 8seconds.
In 2015, Cheil industries completed a merger with Samsung, which allowed the company to leverage Samsung’s global brand name, technology and international presence to expand its business operations. The company now boasts over 3,700 employees and recorded revenues of $11.9 billion as of May 2016.
Country: United States
Revenue: $ 15.8 billion
The Gap was founded in 1969 by Doris and Donald Fisher in Ocean Avenue, San Francisco. The couple invested $63,000 into the company, which recorded an astounding $2 million in sales in just two years later. The retailer soon began to aggressively pursue expansion in the local market, managing 25 outlets by 1973. The decades that follow would see the company expand under the leadership of the Fisher family into international markets and establish itself as a powerhouse in the fashion industry.
Today, The Gap controls five international brands – Gap, Banana Republic, Old Navy, Athleta and Intermix – and manages over 3,300 stores in 90 countries, with an additional 400 stores operating under franchise agreements. Although the Fisher family is no longer active in the day to day running of the company, they maintain a 43% stake.
Revenue: $17.31 billion
Fast retailing Co is a Japan-based fashion retailing company best known for its leading subsidiary UNIQLO. The company can trace its roots to 1949, when a tailor by the name of Hitoshi Yania founded a roadside menswear shop called Ogori Shoji. His son, Tadashi Yanai began his career selling kitchenware and men’s clothing at a Jusco supermarket but soon joined the family business in 1972. In 1991, the company Fast Retailing Co and was listed on the Hiroshima Stock Exchange three years later as it became the fastest-growing retailer in Japan, making Yanai Japan’s richest individual.
Today, Fast Retailing Co is a leading player in the fashion industry with revenues of $17.31 billion, and was ranked as the 41st Most Innovative Company in the World by Forbes.
Revenue: $21.73 billion
H&M is the second largest fashion retailing company in the world. Founded in 1947 by Erling Persson in Västerås, Sweden, the store (originally called Hennes) was a women’s clothing specialty retailer but later expanded to include menswear after the successful acquisition of men’s clothing brand, Mauritz Widforss. The acquisition also resulted in a change of name to Hennes & Mauritz, which was later changed to H&M for easy pronunciation as the company began to expand into international markets.
Today, H&M controls global brands such as H&M, COS, Weekday, Cheap Monday, and Monki, and operates more than 4,300 stores across 64 countries. The company continues to be actively managed by the Persson family, with Erling Persson’s son Stefan leading the firm as Chairman of the Board, while Stefan’s son Karl-Johan works as President and CEO. The Persson family also collectively controls a 30% stake and retains a 60% of the voting rights.
Revenue: $23.27 billion
Owning Family: Ortega
Inditex, best known as the owners of Zara, is the largest fashion group in the world today with revenues of $23.27 billion. The family-owned business can trace its beginnings to 1975 when Ortega Amancio, together with his wife Rosalia Mera, founded a small clothing retail store in A Coruna, Spain. Originally called Zorba, the store was forced to change its name to Zara when it was discovered that another business went by the same name. In the 1980s the company implemented a new design and distribution method that drastically reduced the time between design, production, and arrival at retail sites, incorporating emerging computer technology in the process.
Ever since, Zara has been at the forefront of the fast fashion revolution, operating a highly efficient supply chain and inventory system, allowing the latest designs from fashion shows in New York, Paris and Milan to be rapidly translated into affordable clothing sold at Zara stores across the globe within just 15 days. Inditex also manages a number of other brands including Zara Home, Massimo Dutti, Bershka, Oysho, Pull and Bear, Stradivarius and Uterqüe, for a grand total of over 7,000 stores across 91 countries worldwide.