Meet Amancio Ortega, the reclusive retailer who overtook Bill Gates as world's richest

As per the real time data from Forbes, net worth of Ortega stands at $78 billion as on Friday and that of Gates at $77.4 billion

FP Staff September 10, 2016 12:05:50 IST
Meet Amancio Ortega, the reclusive retailer who overtook Bill Gates as world's richest

Amancio Ortega, the 80-year-old founder of fashion group Inditex that owns Zara, overtook Microsoft founder Bill Gates as the world's richest man for just two days last week on account of a rise in share prices of his company, said a report in Forbes. The ranking is based on the real time net worth.

The stock of Spain-based Inditex, the world's biggest retailer which operates over 7,000 stores in 91 countries, rose 2.5 percent on Wednesday lifting his wealth by $1.7 billion, according to the report. The shares fell on Friday morning by 2.8 percent. However, as per the real time data now, net worth of Ortega stands at $78 billion as on Friday and that of Gates at $77.4 billion.

Meet Amancio Ortega the reclusive retailer who overtook Bill Gates as worlds richest

Amancio Ortega, founder of fashion group Inditex. Image: Wikicommons

Apart from Zara, which is its flagship store, Inditex also owns Zara Home, Massimo Dutti, Bershka, Oysho and Pull and Bear. This is not the first time that Ortega, son of a railway worker, has overtaken Gates as the richest man.
It was in October 2015 that he overtook Gates for the first time to be the world's richest. According to a Reuters profile of the reclusive retailer genius, "the brief appearance of Ortega at the summit of the Forbes "real time" global rich list (then) was hailed in Spain as a milestone".

In the profile, Reuters said Ortega turned Zara into a byword in chic for the money-conscious, transforming the apparel business with its "fast fashion" model. Affordable imitations of catwalk designs can move from drawing-board to stores within two weeks, and poor sellers are pulled off the shop floor even quicker.

Ortega is seen a rare self-made mogul. He started his professional life at 14 as a delivery boy with a shirtmaker in the wind-swept northern city of Coruna. Within a few years he had set up a workshop making nightgowns, lingerie and babywear, and the first Zara opened in Spain in 1975.

Ortega never gives interviews and is rarely photographed. He did not even attend the inaugural ringing of the stock market bell at the Madrid exchange when Inditex floated in 2001.

In person, Ortega is a persuasive and enthusiastic businessman, who despite progressively handing over the day-to-day management of the company over the last decade continues as an active part of it, people familiar with Inditex say.

He is known for selecting designs based on feedback from shop assistants who zero in on shoppers' reactions.

"If he speaks to a shop assistant and he likes what they had to say, he will pay more attention to that than to any of his managers," a former Inditex director told Reuters.

The Reuters report said Ortega's majority stake in Inditex is held through another company, Pontegadea Inversiones, which Ortega has also used to channel the steady flow of dividends and build up a real estate portfolio.

Another report in Reuters in July 2016 citing corporate filings said Ortega held more than 6 billion euros ($6.6 billion) in prime real estate assets at the end of 2015.

His real estate investment arm, Pontegadea Inmobiliaria, booked assets of 6.06 billion euros at the end of 2015, up 8.3 percent from the previous year, making it one of the biggest property companies in Spain.

According to Reuters, Ortega consolidated most of his private interests into holding company Pontegadea Inversiones last December, with him at its helm and his wife Flora Perez and a close business partner listed as his vice-chairmen.

Pontegadea Inversiones, which holds a 50.01 percent stake in Inditex alongside billions of euros in real estate investments, had income of 810 million euros in 2015 from Inditex dividends, up 5.2 percent on the previous year, the corporate filings show.

In total, Ortega's controlling stake in Inditex amounts to 59.29 percent, with a stake of just over 9 percent held separately to Pontegadea Inversiones.

Using massive dividend payouts from Inditex, which have nearly doubled over the last five years, Ortega has made largely debt-free purchases of prime buildings from London to New York, becoming a major commercial real estate player over that period.

"All the buildings he buys are in prime districts. It's a steady, reliable income stream, almost like a sovereign bond," Carles Vergara, finance professor at IESE Business School, told Reuters.

Ortega's first big real estate purchase was Torre Picasso, an office building in Madrid, bought in 2011 around the time he handed the daily running of the world's biggest clothing retailer to chief executive officer Pablo Isla.

Since then he has bought properties including an office block in London's Mayfair; a stretch of London's prime shopping drag Oxford Street; and the historic cast-iron clad E.V. Haughwout Building in SoHo, New York, which housed a world- famous cut glass and porcelain store in the 19th century and featured the world's first passenger elevator.

Ortega not only rents out his commercial property to Inditex stores like Zara and upmarket label Massimo Dutti at market rates, but also to rivals such as H&M of Sweden and Gap of the United States.

With Reuters

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