By Corina Pons and Jesús Aguado

MADRID (Reuters). – Experienced managers will facilitate leadership transitions. Inditex (MC-:) Next year the family behind billionaire founder Amancio Ortagega will strengthen its hold on world’s largest fashion retailer, analysts and sources said.

Investors suffered a shock last month when Zara owner Pablo Isla announced his retirement to be succeeded by Marta Ortega, a woman without retail experience. Ortega was 37 years old.

Inditex shares dropped 6.1% after the announcement. It lost 5.6 billion euros (roughly $6.3 billion) in market value. Investors are concerned about Isla’s departure because he was the leader of Inditex for 10 years and has helped make it an industry-record.

Analysts and other sources said that the committee of experienced managers will support the new leaders. They are expected to provide continuity and strong support.

The top ten include two family members who have been involved in Massimo Dutti and Zara for decades.

According to one source, the “key to (these changes) is the creation of an management committee which will allow Inditex to be retaken by the family after having ceded part of its power to Pablo Isla over fifteen years,” stated one company source.

Marta Ortega and Oscar Garcia Maceiras will assume their new roles as Inditex’s non-executive chairs in April. Garcia Maceiras is a Spanish lawyer, who spent the majority of his life in banking. Inditex’s headquarters are located in La Coruna, northern Spain.

TRANSFER TO MARTA

Isla was a six-year employee of Amancio Ortega. He retired as the founder in 2011 and Isla has held the position of executive at Inditex for over ten years. Isla did not say what he planned to do when he retires.

Marta Ortega’s role as a non-executive director raised eyebrows. But it wouldn’t be wrong to not read too much into the title of her position, Adam Cochrane said, an analyst at Deutsche Bank (DE:) Research.

He stated that although the role of non-executive Chairwoman in the industry is common, due to her family connection and her involvement in the company she is more likely to have an impact on strategic and brand decisions than the other chairs.

Marta is a 15-year veteran of Inditex and has focused her efforts on Zara’s brand image, fashion, and sales, which accounts for 70% of Inditex’s revenues.

Zara, the younger daughter of Amancio Ortega, was also responsible for sustainability initiatives and Zara’s collaborations with fashion photographers like Steven Meisel and Fabien Baron.

TEAM PLAYER

People who have worked with Garcia Maceiras and sources familiar with Inditex said his ability to delegate and coordinate will bring the best out of a team that managed to navigate COVID restrictions and push sales 7% above pre-pandemic levels in the second quarter, outperforming closest rival H&M.

Four of the Spanish lenders Santander (MC), Popular and Pastor knew Maceiras. They described him as hardworking and skilled in coordination. He also loved sports.

“Garcia Maceiras is not an investment banker or high-profile player but he’s a good team player .” “No one should expect him to do a big shakeup at Inditex,” stated a source, who asked not to be identified but worked alongside him at a Spanish branch.

Carlos Crespo is now the chief operating officer, a role that will add to continuity.

SUCCESSFUL STATEGY

Jefferies (NYSE 🙂 believes Inditex’s success is due to its supply chain. This allows Inditex to tailor its fashions to the needs of customers more efficiently than other companies.

The company, which also owns Bershka and Pull & Bear, manufactures over half its clothes in nearby countries such as Morocco, Turkey and Portugal, helping it avoid the worst of the supply chain snags currently hitting the sector.

A Spanish company also quickly adapted to the pandemic, using its warehouses as logistic centres in support of online orders.

According to Inditex, Wednesday’s third quarter results will be released. Sales growth is expected to exceed 10% over the 2018 period. Credit Suisse (SIX), RBC Capital Markets and Jefferies.

The new management team must not only ride the wave of pandemic restriction, but also show that it is capable of increasing sales for smaller brands of the company and responding to new online threats like China’s Shein.

Guido Stein is a professor and author at Madrid’s IESE business school. He believes that the new double-act will have challenges, but is beginning from a solid base.

“A time of uncertainty is emerging. “The great thing about all of this is Inditex’s kingdom is doing fantastic,” he stated.