Zara Management Developments and 3D Printing

By on January 15th, 2022 in Corporate, news

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Marta Ortega [Source: WSJ]

Charles R. Goulding and Preeti Sulibhavi suggest ZARA should do a lot more 3D printing.

Recently there has been a change in top management at Zara, the global fast fashion brand headquartered in Spain. With the corporate name Inditex, S.A. Zara has over 7,000 stores in 93 markets and employs over 160,000 people. Most of the press coverage has focused on the company’s chair change from Pablo Isla to Marta Ortega, the 37-year-old daughter of the founder and 59% owner, Amancio Ortega. 

Pablo Isla is viewed as one of the world’s top-performing executives by the Harvard Business Review. One of Marta’s immediate moves was to replace Carlos Crespo, the CEO, with Oscar Garcia Maceiras. These changes are occurring just as sales have plunged during the pandemic.

Although perhaps operating under the radar, Marta Ortega is known for her fashion acumen and does have 15 years with the company. We have previously written an article describing that typically when top management changes many business changes generally follow soon after.

The pandemic has resulted in a substantial increase in the apparel industry’s utilization of 3D printing, particularly to manufacture PPE. Investors are looking to Oscar Garci Maceiras to increase digitalization, which is where 3D printing should have an increased role. In 2016, there was a 3D printed costume exhibition at the Metropolitan Museum of Art featuring various types of 3D printed apparel and costumes, and the utilization of 3D printing technology in the textile industry has only grown since.

In a presentation for her Savannah College of Art and Design Final Project titled, “The Future 3D Printing Fashion System – ZARA,” Elsa Min Kao studied what 3D printing could do for ZARA. She hypothesized that to “fulfill the goal [to change the fashion industry] more comprehensively, 3D printing and all the other advanced technology of the 3D world have the great potential to do so.”

3D Printed Hymenium Bag by Julia KĹ‘rner [Source: The Fashion Retailer]

There are many examples of how 3D printing is being utilized by the fashion industry. Whether it is a 3D printed Hymenium handbag by Julia Kőrner, or a 3D printed sweater from Shima Seiki, USA, Inc, there are a variety of options to choose from these days. In addition, the onset of the global pandemic has led many fashion brands to pivot from focusing solely on haute couture to manufacturing critical PPE for the government and healthcare facilities.

​The Research & Development Tax Credit

The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software. 

3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing, and revising 3D printed prototypes can be included as a percentage of eligible time spent for the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software counts as an eligible activity. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.

Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.

Conclusion 

The pandemic greatly accelerated the use of 3D printing for apparel & PPE including, masks, gowns and gloves. We would anticipate much wider use of 3D printing technology in many of the world’s leading fashion houses, such as Zara. 

By Charles Goulding

Charles Goulding is the Founder and President of R&D Tax Savers, a New York-based firm dedicated to providing clients with quality R&D tax credits available to them. 3D printing carries business implications for companies working in the industry, for which R&D tax credits may be applicable.

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