He writes (h/t: Alison Kemper):
Readers who’ve come to know me through my column may not be aware that one of my big
academic interests has been economic geography — the study of where stuff gets located and how the location decisions of different players in the economy interact to produce things like cities and industrial belts. Anyway, there’s a nice WSJ article today about the interesting case of
the fashion chain Zara.What makes Zara interesting is that its strategy, which is based on using IT
to make its stores extremely responsive to changes in consumer taste, has
actually worked against globalization:Stores are stocked with new designs twice a week. Collections are small and
often sell out, creating an air of exclusivity and cutting down on the need for
markdowns. The company ships clothes straight from the factory to stores. Unlike
competitors who manufacture most of their wares in Asia, Inditex makes
two-thirds of its goods in Spain and nearby countries such as Portugal, Morocco
and Turkey. The retailer says the higher labor costs are offset by the
flexibility of having production close to its warehouses and distribution
centers, which are all in Spain.No big moral here. I just think it’s interesting.
Very much so. Also interesting that Zara came up during our visit to Spain where some Spanish business contacts (the really in-the-know kind) said that Zara founder and CEO is worried to death about the decline of exactly this production infrastructure in the face of global cost competition.
