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By Sarah Morris
MADRID (Reuters) - Zara, the Spanish-based chain whose "fast fashion" model has already helped make it one of the world's biggest clothing brands, is to pioneer a new stock control system designed to make its supply chain even speedier.
The chain's parent company Inditex SA (MC:ITX) told its annual shareholders' meeting Zara was implementing a microprocessor-based tagging system allowing items to be tracked from factory to point of sale.
Inditex, the world's largest clothing retailer, long admired for the speed with which it imitates catwalk designs and sends them to stores around the world, said it had already put the tagging system into 700 of its more than 6,300 stores, with its flagship brand Zara going first out of a stable also including Massimo Dutti and Bershka.
It would roll out the new tags at the rate of 500 more stores a year, Chairman and Chief Executive Pablo Isla said in a presentation to the meeting.
The Spanish retailer gave no figure for the total investment of the radio frequency identification (RFID) system, intended to improve the group's inventory management by instantly showing garments that need reordering.
Tags would also improve customer service and improve security, said Inditex.
Fast restocking of items and sizes that sell out is crucial to maximising retailers' profits. When a Zara dress is worn by a celebrity, for instance, shops can sell out of the item fast.
A particular size may also be in more demand in one store in a particular neighbourhood and supplying it fast to a store nearby helps maximise sales.
Inditex pioneered fast fashion with Zara, where designer looks can be in shops at affordable prices within a fortnight of being conceived.
It operates a centralised distribution system in which suppliers from around the world send clothes to distribution centres in Spain before they are dispatched to stores in its 87 markets.
(Editing by David Holmes)