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Zara: A model fashion retailer
Zara can create new fashion lines within three weeks.
Do you shop in Zara?

LA CORUNA, Spain (CNN) -- Spanish retailing giant Zara has one of the sweetest success stories in the fashion business.

While its rivals start planning their lines on average nine months before they hit the shelves, Zara has a reputation for instant reaction to fashion trends and rapid restocking of stores to meet demand on items that are hits.

It's also not afraid to pull items from shelves and cancel ones that aren't selling.

Zara can make a new line, from the initial concept to when it arrives in the shops, in just three weeks.

But how did this once-tiny lingerie company, based in the small northern Spanish town La Coruna, grow to become one of the biggest -- and most successful -- players in its game?

The secret, according to CEO Jose Castellano, is its reliance on communication, and the way it uses existing technology to take control of almost every aspect of design, production and distribution.

Intidex, the company that owns Zara, is still located on the outskirts of La Coruna in the Galicia region.

Its design-and-manufacturing headquarters is a sprawling industrial complex with a vast network of underground tunnels lined with conveyor belts that transport clothing from one part of the complex to another.

Almost all of Zara's clothes are made here, right from the basic fabric dying stage.

"Technology in this company is important and will be more important in the future," says Castellano.

"The technology we use is mainly information technology and the communication between the shop managers and the design team here in the headquarters."

Designers are in daily contact with store managers, discussing which items are most in demand and which aren't.

This, supported by real-time sales data, allows the designers to action repeat orders and create fresh designs, and from La Coruna they are shipped directly to the stores, eliminating the need for expensive warehouses.

Zara lines rarely stay on the shelves for more than a month.

Retail analyst Richard Perks, of Mintel, says what Zara does so successfully is remarkable.

"They've got to get the design. They've got to engineer it for low-cost production. They've got to take the gray fabric and print it. They've go to get it out to their outworkers to be made up and they've got to ship it from Galicia right across Europe. That is an unbelievable achievement."

Zara spokeswomen Carmen Melon says that because things happen so quickly at La Coruna, communication is absolutely key.

"We have five different teams sharing the same space, so design people work together with product people and merchandising, as well as the people who provide the samples and patterns."

Melon says the Zara philosophy is to use technology to make sure departments and outlets the world over constantly know what is needed when and where.

"The production managers provide the link between the store managers and the production team. With store managers placing up to two orders a week, the product managers help make sure the right decisions are taken about controlling the rotation of the merchandising," she says.

And, according to Marie Claire editor Marie O'Riordan, the formula works. "With other high-street retailers, the risk is buying something that you'll bump into somebody wearing the same thing, and it spoils the effect," she says.

"With Zara, because the stock turnover is so fast, you have to get there on day one. It tends to sell out two days later so you have a real chance of being a little bit exclusive, which is quite unusual for a high street."

CNN's Paula Hancocks contributed to this story

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