Spanish Tycoon Briefly Surpasses Bill Gates to Become Richest Man in the World

Amancio OrtegaAmancio Ortega’s Net Worth is Now $79.8 Billion

Who is the richest person in the world? You may want to look in the fashion section of your newspaper rather than the business or electronics columns, because for a few hours on October 27, the richest man on earth was Amancio Ortega, the owner of Industria de Diseno Textil SA, (NASDAQ:IDEXF), better known as Inditex, the umbrella company for the Zara retail empire. Owners of Inditex stock may not have matched Bill Gates’ wealth, as Ortega managed to do, but they too would have been a little richer, as the stock has reached its highest ever valuation on the Madrid Stock Exchange over the last days of October 2015. (Source: “Who is the billionaire behind Zara?The Telegraph, Oct. 28, 2015.)

If given a choice between betting on the owner of a textile company or the founder of a Silicon Valley startup as the richest person, seasoned gamblers and investors would pick the latter almost every time. Nevertheless, Gates surrendered his scepter to Amancio Ortega, who runs a business more rooted in the Industrial Revolution era marked by textiles than the computer and sharing economy of the early 21st century. Ortega is still on top, even if only for a few hours.

The fact that a traditional retail business like Inditex that’s based on quality items at reasonable prices with only a small online component can help produce a Silicon Valley-beating billionaire in 2015 suggests that traditional investors still have options. In retail for instance, stocks like Macy’s or Nordstrom might be worth considering.

Mr. Zara has a fortune now valued at $79.8 billion, while Mr. Microsoft only has a measly $78.1 billion. That extra billion allows Ortega to afford a few more yachts and Gulfstream jets and a lobster dinner to boot. The two asset accumulations are very close and they will continue to fight each other for leadership in the next few days. Trailing many yachts behind in third place, with a fortune of just under $64.0 billion, is U.S. financial guru Warren Buffett, looking a little less wise now.


What Mr. Ortega’s surprising climb to the top of wealth’s Mt. Everest suggests is that Zara, more than a retail chain, is now an empire. The brand has stores in 90 countries and boasts 140,000 employees. However, the secret of financial success of Ortega is all attributable to Inditex, the group created by his wife. In addition to Zara, it owns chains such as Massimo Dutti, Pull and Bear, Bershka, and other clothing companies and Inditex stock has been flying these days. Ortega owns about 59.3% of the textile giant.

The value of Inditex stock has soared in recent years. The company had revenues of about $19.0 billion. Its president, Pablo Isla, who succeeded Ortega at the helm of the company, has recently been recognized as the third most successful CEO in the world by the Harvard Business Review. (Source: “Is Pablo Isla the best non-family CEO of a family business in the world?” Family Capital, Oct.15, 2015.)

Ortega decided to market the clothes manufactured directly and in 1975 opened the first Zara store in La Coruna in the Galicia region of Spain. The chain has targeted steady expansion with new stores in major cities worldwide. Inditex was founded in 1985 as the holding company for the group, which went public in 2001.

Since its premiere, the share price has increased by more than 11 times and the company has doubled the dividend every five years or so. The firm was internationalized in 1988, with a store in Oporto. Zara opened in New York City in 1989 and in Paris in 1990. Its new flagship store occupies premium real estate space on Fifth Avenue in NY, just below Saks.

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