Fast Fashion | Stitch by Stitch | 2

1949, A Coruña, a port town in northwestern Spain. 13-year-old Amancio Ortega Gaona enters a small grocery store with his mother, Josefa. As they walk the aisles, Ortega reaches for some sweets, but his mother pulls him away. We can only afford the necessities. Ortega's father is a railway worker, and the family of six live in a small row house by the train tracks. Josefa works as a housemaid.

Josefa gathers a few essentials into her basket. A loaf of bread, a bottle of milk, some half-priced meat. As she puts the items on the counter, the cashier glares at her. No. I can't keep selling to you on credit. Please, I will pay very soon. As soon as my husband and I get our next wages. That's what you always say. I'm sorry. You either pay now or you can't have it. Josefa scrounges in her purse, managing to find a few pesetas. That only covers the bread.

Josefa fights through the tears as she nods, taking the loaf of bread and sticking it into her purse. She grabs her son's hand. I'm sorry, Amancio. We'll get more food next time. I promise. It's okay, Mama. He sees the pain in his mother's eyes. The shame of the moment makes such a strong impression on Ortega that he vows to get out of poverty. He quits school.

and gets a job as a shop hand at a local shirt maker called Gala. During his tenure there, he learns how to sew and notices that the shop's owners avoid the cost of third-party distributors by delivering orders themselves. After a few years, he moves on to work with two of his siblings at a clothing store called La Maha. Ortega sees an opportunity.

His bosses seem to be paying an awful lot to stock the store. What if he could produce original designs faster and sell them for a lower price while maintaining quality? At age 27, he starts his own business, along with his fiancée, Rosalia Mera. It's a small business, but it is the beginning of an empire, one that will become known as Zara. and will make Ortega one of the wealthiest people in the world.

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Meanwhile, H&M soared, opening its first store in the United States and making headlines for a one-of-a-kind collaboration with Chanel's Karl Lagerfeld. In this episode, we explore the beginnings of both companies as well as... two more, Zara, which finds an advantage with a short supply chain, and Forever 21, an American discount mecca founded by two Korean immigrants. This is Episode 2.

Stitch by Stitch. 1964 Sheffield, England. Ten years before the birth of Zara. In a small back corner of the basement of the popular women's department store called Peter Robinson, there's a selection of hip, youthful clothes. they stand out next to the store's conservative look. The Peter Robinson department store chain is owned by the wealthy and prestigious Burton family, known for their vast chain of tailoring stores and factories. And now...

a member of the next generation of Burdens, is trying to make his mark. 46-year-old Raymond Burton is the chairman of the department store. He has a Cambridge degree, a Harvard MBA, and served in World War II. This background gives him self-confidence and high expectations for himself. He'll need both to accomplish his plan to take the family business in a new, trendier direction.

Burton stands next to a young buyer named Diane Wadey. They look on anxiously, waiting for customers to discover their new little corner of flashy clothes, what Raymond's dubbed Peter Robinson's Top Shop. Burton turns to Wadey. I have a good feeling about this. Wadey is skeptical. But we haven't had a single customer walk over here yet, and it's been an hour. Give them time. We just need young people to find us and spread the word.

And will they find us in the basement? Teenagers don't shop here unless they're dragged by their mothers. We might be in the basement for now, but with your eye, I think our customers will be clamoring for more before long. Waitie has made a name for herself by having a knack for spotting talented young designers. I'm excited about the pieces from this designer, Mary Quant.

She's raising hemlines and using all these bright, bold colors like scarlet and ginger. And I have ideas for more collaborations, too. I think we're ahead of our competitors. Not many stores are targeting shoppers so young. We have a real opportunity here. As they watch, two young women wander over and begin to comb through the garments with curiosity. Wadey and Burton can barely hide their excitement.

I think Peter Robinson's Top Shop is about to make its first sale. And it will be the first of many. The following year... Topshop opens in the basement of Peter Robinson's flagship store in Oxford Circus. And by 1974, Topshop officially gets out of the basement and becomes a standalone store. By 1976, it's opened a total of 55 stores and earns over a million pounds in profit. Burton's legacy as the founder of Topshop is secure. But ultimately...

He won't be the man most associated with the mega brand. No, that honor will go to a leader far more brash whose choices will wreak all kinds of havoc.

1975, A Coruña, Spain. Amancio Ortega Gaona walks the aisles of his small textile manufacturing company, Confecciones Goa. Ortega is now 39 years old, decades past that moment at the grocery store with his mother. Ortega grasped the arm of his wife, Rosalia. and heads her to a back room, away from the prying eyes of their employees. Rosalia, we need to talk. The back room is full of racks and racks of clothing they produce on site.

Quilted bathrobes and housecoats, but also shirts, pants, and dresses. Ortega turns to Rosalia. We have a big problem. Rosalia furrows her brow. What's wrong? Our wholesalers cancel their order. How many items? Everything in this entire room. As they look around, their hearts sink. There are easily hundreds of items that have already been produced and now they have no way to sell them. All that time and money straight down the drain. What are we going to do?

We were counting on that sale. We'll be in the red for months without it. It could be the end of us. The two have a seven-year-old and a four-year-old to provide for. Their youngest has cerebral palsy. They also have a workforce of 500 employees that depend on their jobs at the factory. Ortega looks around, pondering. Then... An idea strikes. We have to sell it. The merchandise? But how? If our buyer doesn't want it? Maybe we don't need a buyer. What if we sell it ourselves? Amancio.

We have no storefront, no customers. We're a manufacturing company. And I think it's time we become more than that. Why not have our own store? My first job was in a store. I was 14. Opening a store will be awfully expensive. What if it doesn't work and we can't sell these clothes? Our entire business could go under. It won't. Think about the possibilities.

If we cut out the middleman and own the manufacturing, we can increase our profits. We'll control the entire process. Don't you see we're forging a new path, doing something different? Well... I just hope doing something different doesn't make us go bankrupt. Within the year, they obtain a storefront in downtown Akarunya. Now, they need a name.

He and Rosalia think about what brings them joy. They land on the name Zorba after their favorite movie, the 1964 smash hit Zorba the Greek, starring Anthony Quinn. As soon as their sign is up, they can open the doors and begin the next chapter. But there's a problem. Ortega and his wife, Rosalia. stand outside their new storefront in downtown A Coruña, Spain. They're a few days away from the grand opening. This store is the first step in their plan to sell clothes inspired by high-end fashion.

but at a much lower price. In the process, they hope to democratize the clothing industry. Rosalia watches from the sidewalk as her husband hangs molded letters that spell Zorba. Across the building's facade, she shouts up to him. A little to the left. Ortega adjusts one of the letters. Is that better? A little bit. Now, move the A down. Move the A down. Just then, a man approaches, frowning at the new sign. Excuse me, is this your business? Ortega descends the ladder, sizing the man up.

Yes, our new clothing store. And who are you? I own a bar two blocks away. Want to guess what my bar is called? The pleasant smile fades from Ortega's face. Zorba! My bar is called Zorba! And I think having two Zorbas in town is just going to confuse everyone. We had no idea there was already a business with the same name. Clearly. Well, I hope you reconsider. You haven't opened, and I've been here for years.

I would hate for us to have a problem. I'm sure we can find a solution. I hope so. The bar owner stalks away. Ortega and Rosalia look at each other, worried. We already made the molds for the letters. Maybe we can rearrange them into something. They both look at the letters. Z-O-R-B-A. Bora. Sounds too much like Bora Bora. You know, we could reshape that O. Turn it into an A. Call it Zara.

After the harbor in Croatia where we honeymooned. I like it even better than Zorba. It feels more like us. And hopefully nobody already has a bar with that name. Ortega's instincts about the name of his business are spot on. He's also right about the potential in owning their own manufacturing arm. This allows them to respond to consumers' whims with lightning speed.

It's a game changer and sets the company up for major success. Meanwhile, in the UK, a young British entrepreneur is also dipping a toe into the fashion industry.

London, 1981. Philip Green, a 29-year-old businessman with dark, bushy hair and the slick confidence of a used car salesman, is meeting with a potential investor. After dropping out of school at age 15, he quickly learned he was skilled at negotiations and found work acting as a go-between for suppliers and wholesalers.

He's also been testing the waters with other business ventures, including an import and export business. But now, he has an idea that he is convinced will put him on the map in the fashion industry. Green holds the gaze of the investor. We have an untapped corner of the market here in the UK. American-style jeans are very popular, but no one's selling them at affordable prices.

My jeans line will be named after Joan Collins, the actress. We'll also make them in China where it's less expensive. The investor looks intrigued. You have relationships in China? I worked for a wholesale shoe company that did a lot of business with manufacturers in Hong Kong. I know the lay of the land there. And what about Collins? Is she on board with you using her name? She's agreed to collaborate on the line.

We're going to rush the jeans to stores. British girls love Joan Collins. Green could not be more confident. He orders a million pairs of dark denim Joan Collins jeans from Hong Kong manufacturers. He charges 17 pounds per pair, a fairly high price for simple denim at the time. But he's certain they'll sell out. Then, Green holds a launch party in the upscale London neighborhood Mayfair.

at his shop, Bond Street Bandit, where he typically sells surplus designer clothes from previous seasons. He and Collins pose for photos as they cut into a chocolate cake shaped like a pair of jeans. But the idea is a complete flop. British girls don't actually love Joan Collins. Young trendy shoppers don't...

Think of her, a middle-aged celebrity for a different generation, as someone they want to emulate. Green is forced to sell the jeans at a loss. While he has a keen sense for business and negotiations, he is very out of touch with what young customers consider cool. While it'll be decades before Green purchases Topshop, these strengths and weaknesses...

foreshadow the twists and turns of his career. While Green struggles to get his footing in the 80s, Zara, Topshop, and the Swedish company H&M battle among themselves for the budget-minded shopper. But these squabbling mega-brands could be forgiven for overlooking a humble American couple that's about to get into the game, too. And they're not necessarily planning to play by the rules.

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1982, a modest one-bedroom apartment in the Highland Park neighborhood of Los Angeles. Jin Suk Chang, a 26-year-old Korean immigrant, bustles around in the kitchen. Her husband... Du Wan Chang enters the apartment. He's three years her junior and has round cheeks and a sunny smile. From the way he carries himself, it's clear he's exhausted. But he's not one to complain.

Du Wan sits down at the kitchen table as Jin Suk prepares him a plate of dinner leftovers. He smiles at her gratefully. How was your day? Very good. And busy. I had seven clients today. Jin Suk trained as a hairdresser back in South Korea. She's put those skills to good use in her new home. I learned something interesting at the gas station today. Hi, yobo. You have so many jobs.

The gas station, the coffee shop, cleaning offices. I'm worried. It's too much. You work 19 hours a day. Please, don't worry, sweetie. So, back to what I learned at the gas station. I've started asking people who drive fancy cars what they do for a living. And you know what they all say? They work in the apparel industry. Makes sense. People love looking good. I think I'm going to look for a job in a clothing store.

Try to learn how things work. I think this could be our American dream. Imagine if we opened our own store. You've always had such an eye for trends. We could sell South Korean-inspired clothes to the community here. We need more money to start our own business. This store. What would you call it? Fashion 21. Why 21? Because it's the most enviable age.

You're young and your whole future is ahead of you. And imagine one day we could have giant stores in every major city in America. This could be our legacy. Jin Suk considers the idea. A devoted Christian who attends church every morning, she knows where she will find her answer. I will pray on this. If God thinks we should open a store... That this will make us successful? He will tell us. By 1984, they scraped together $11,000, around $29,000 in today's dollars.

and open their first store just blocks from their apartment. The 900-square-foot Fashion 21 carries South Korean trends produced by Korean-American manufacturers in Los Angeles. At first... They stock their store by capitalizing on wholesale closeout deals. And the prices are cheap. Dirt cheap. So cheap that customers from the Korean-American community flock to the store in unprecedented numbers.

While Du Wan handles the landlord and vendor relationships, Jin Suk leads design and merchandising. And she uses her knack for spotting easy-to-copy trends to personally approve... each design the store will sell. From there, she strategically places the ones she feels most confident about at the very front. In its first year of business, Fashion 21 does a remarkable $700,000 in sales. The Changs, born-again Christians who came to the United States with no money and no degrees, have made it.

They incorporate their faith into the store in small, subtle ways. Soon, they rename their company Forever 21, and each yellow shopping bag is emblazoned with John 316. a reference to a Bible verse. The Chongs boast that God told them that they should open a store and promised that they would be successful. As Forever 21 eyes an expansion into California shopping malls,

Over in Europe, it's the beginning of a new era for Zara. 1988, Santa Catarina Street, Porto, Portugal. It's the grand opening of a new Zara store, but not just any store. After over a decade of slow growth throughout Spain, Zara is finally expanding outside Spain. Owner Amancio Ortega Gaona stands with Jose Maria Castellano, a relatively new executive at the company. They linger behind the counter and watch as customers stream into the store.

fawning over the brand's affordable blouses and jackets. Castellano looks pleased. This is promising. I think we're going to like it here in Portugal. Spain is great, but we have a store in every major city there. This is the new frontier. Ortega looks nervous. It's also a big risk. How do we know that customers here will go for it the same way they did back home?

I think we may have bigger problems back home. Have you seen what's going on with H&M? They're doing really well in Germany and Sweden, too, and how much longer till they wind up on our home turf? You're right. But we have an advantage. They outsource their manufacturing. Their products come from the East. There's less room for error, less time to adjust if something isn't selling. We can get clothes on the shelves twice as fast because we own our own production, and it's close by.

Castellano nods. You know, I think Portugal was the right move for us. It's close to Spain and our suppliers, and the culture is similar. But now we're going to have to learn how to adapt for other markets. But no matter what... that's going to make us stronger. Castellano and Ortega are right. Shoppers around the globe are clamoring for fast fashion. And each company...

is branching out from its country of origin. Soon, Zara, H&M, Topshop and Forever 21 will be going toe to toe in the same international markets. Fast fashion is booming, but its ultimate price tag will go far beyond an affordable pair of jeans. In our next episode, as the world sinks into a financial crisis, H&M and Forever 21. deal with crises of their own. And a Chinese company known as Xi'an takes fast fashion into hyperdrive.

From Wondery, this is Episode 2 of Fast Fashion for Business Wars. A quick note about recreations you've been hearing. In most cases, we can't know exactly what was said at the time. Those scenes are dramatizations, but they're based on historical research. I'm your host, David Brown. Aaron Conley wrote this story. Voice acting by Michelle Phillippe, Jennifer Sun-Bell, and Will Choi. Karen Lowe is our senior producer and editor. Edited and produced by Emily Frost. Sound design by Kyle Randall.

Our associate producer is Kate Young. Our producer is Dave Schilling. Our executive producers are Jenny Lauer-Beckman and Marshall Louis. Created by Hernan Lopez for Wondery. Hey basketball fans, Steve Nash here. Ready to elevate your basketball IQ? I'm teaming up with LeBron James to bring you the latest season of Mind the Game. And we're about to take you deeper into basketball than you've ever gone before. We're breaking down the real game.

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