Inditex, the parent company of Zara and the world’s largest publicly listed fast fashion company, is taking steps to expand its budget-friendly brand Lefties in response to the growing competition from Chinese-founded Shein. The rise of Shein, an online marketplace known for its low prices and lack of physical stores, has created pressure for retailers like Inditex and H&M to find ways to address its competitive pricing strategy.
Zara, once known for its affordability, has seen its competitiveness in pricing diminish over time due to price increases aimed at protecting profit margins and targeting more upscale clientele. However, alongside these changes, Inditex has been quietly expanding its offerings in the budget-friendly segment, with Lefties playing a significant role in this strategy.
Originally conceived as an outlet for Zara’s excess inventory, Lefties has now expanded its presence to 17 countries, including Egypt, Mexico, Romania, Saudi Arabia, Turkey, and the United Arab Emirates. The brand offers products like jeans for 17.99 euros, dresses starting from 7.99 euros, and handbags priced at 5.99 euros.
While Zara remains the flagship brand for Inditex, Lefties’ growth signifies the company’s intention to capture a share of the value-focused market segment. This expansion comes at a time when consumers are increasingly seeking budget-friendly options, particularly in markets where Shein’s aggressive pricing strategy has intensified competition.
In Spain, where Lefties operates 25 stores according to its website, the brand has experienced significant growth, attracting around 5 million customers in 2023, just shy of Shein’s estimated 5.2 million customer base. Lefties’ expansion in emerging markets indicates Inditex’s strategy to cater to consumers who may prefer more affordable options than those offered by Zara.
Swetha Ramachandran, a portfolio manager at Artemis Fund Managers in London, suggests that Shein’s impact on the fast fashion market and Inditex’s response to it are recurring themes in discussions with the company’s management. Lefties’ growth and presence in multiple markets position it as a strategic asset for Inditex as it navigates the evolving dynamics of the fast fashion industry.
