Market Selection Zara’s international expansion began in 1988 with the opening of a store in Oporto in northern Portugal. In 1989, it opened its first store in New York and in 1990, its first store in Paris. Between 1992 and 1997, it entered about one country per year (at a median distance of about 3,000 kilometers from Spain), so that by the end of this period, there were Zara stores in seven European countries, the United States, and Israel. Since then, countries had been added more rapidly: 16 countries (at a median distance of 5,000 kilometers) in 1998–1999, and eight countries (at a median distance of less than 2,000 kilometers) in 2000–2001. Plans for 2002 included entry into Italy, Switzerland, and Finland. Rapid expansion gave Zara a much broader footprint than larger apparel chains: by way of comparison, H&M added eight countries to its store network between the mid-1980s and 2001, and The Gap added five. (Exhibit 14 tracks aggregate store additions across all of Inditex’s chains.) Inditex’s management sometimes described this pattern of expansion as an “oil stain” in which Zara would first open a flagship store in a major city and, after developing some experience operating locally, add stores in adjoining areas. This pattern of expansion had first been employed in Spain and had been continued in Portugal. The first store opened in New York was intended as a display window and listening post, but the first store in Paris anchored a pattern of regional—and
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