The Spanish fashion group Inditex is not only one of the leading companies at national level, but as the parent company of popular fashion brands such as Zara, Massimo Dutti, Pull&Bear, Stradivarius and Bershka, it is undoubtedly also one of the leading companies in the industry worldwide.
FashionUnited takes a look at the successes and challenges that will shape 2023 for Inditex.
Business results: an explosive start that faltered in the home stretch
The Inditex Group started 2023 with a new strategic plan after recording “record” sales and profits at the end of the last financial year.
After a first quarter in which sales were positive in all geographical areas in which the multinational company operates, in all formats and across both physical and online channels, the start of the second quarter was equally positive, with a profit jump of 54 percent.
In the first six months of the financial year, in which the group generated a net profit of 2.52 billion euros, this upward trend not only continued, but also improved in percentage terms. However, development slowed in the third quarter.
Meanwhile, the company’s board of directors has agreed to reduce the number of chairmen following the departure of Emilio Saracho.
Commitment to the environment
After being alerted to the impact of aviation, Inditex has partnered with companies Atlas Air and Repsol to advance the decarbonization of air transport, as well as logistics company Maersk to reduce its greenhouse gas emissions by sea and land.
After discontinuing the Join Life label and giving it a new value, Inditex has committed 15 million to expand regenerative agriculture models. In 2023, Inditex also set new sustainability goals, promising to achieve “zero net emissions” by 2040.
The company is committed to the goals of its circular economy project and purchased the first 2,000 tons of circular waste in October. An agreement was also signed with the International Apparel Federation to promote the transformation of the sector. And together with Jeanologia, she presented a technology that reduces the release of microplastics from textiles.
Steps towards diversity and inclusion
2023 was also the year in which Inditex signed its first equality plan and, after committing to increase the number of people with disabilities in the workforce, presented in Madrid the new store model of its inclusive project For&From. This is the name of the group’s stores, which employ all types of specialists with different levels of disabilities.
Strategic adjustments and global challenges
The inauguration of a new warehouse with an investment volume of 105 million euros on the border between the Netherlands and Germany was also an important step in Inditex’s strategy. From 2023, Inditex will charge 1.95 euros for returns in Spain, a measure that the company is already applying in the rest of its markets.
In Latin America, Inditex has restructured its business in Argentina and Uruguay and opted for the franchise system. The complete sale of the business in Russia was confirmed, while in Burma the withdrawal from the country’s factories was announced. In a difficult environment internationally, Inditex stores in Israel were(temporarily) closed in October, reflecting the challenges in the Middle East region.
In Spain, the panorama was heavily influenced by worker protests.
National strike and initial demands
The Spanish unions CGT and USO called for a nationwide strike at Zara, Lefties, Kiddy’s Class and Pull&Bear on January 7th to achieve wage equalization between regions. Although there were local agreements, the CGT extended its demands to the national level, including wage increases and uniform benefits.
Inditex agreed to negotiate global wage measures with the UGT union and the CCOO and set up a government roundtable on January 25 to look at provincial collective agreements and review the commission system.
Among the proposed measures was a more transparent and fairer incentive and commission plan. Although CCOO and UGT had signed an agreement in November, the “Mesa Estatal” wanted to create the basis for a nationwide agreement to equalize working conditions within the Inditex group in Spain.
During a strike on January 7, workers at several Inditex chains protested for wage equalization and improvements. In the event there is no response, further mobilizations have been announced.
On January 13, protests took place in Valencia to demand fair working conditions and benefits. This action took place ahead of scheduled negotiations between Inditex and union representatives at the state level, bringing forward the talks scheduled for January 25th.
Progress and challenges at the negotiating table
Negotiations began to discuss working conditions, the equal opportunities plan and the state wage scale. The CCOO put forward a series of demands ranging from pay to social issues, advocating for internal promotions, transparency in selection processes and the removal of barriers to women in the workplace.
The CGT called for new demonstrations on January 23rd, demanding wage increases, the recognition of social benefits comparable to those of other sectors of the company, and also protested against its exclusion from the state negotiating table convened for January 25th.
Just 24 hours before the state roundtable, further protests broke out in Galicia and Madrid over the closures and the alleged lack of support from CCOO and UGT.
The “Mesa Estatal” was constituted on January 25th and dealt with wage measures and social benefits. It was agreed on an advance of three percent and the renewal of the incentives. Although progress has been made, it was noted that full alignment was not possible. A new meeting was scheduled for February 2nd, but this did not prevent a national strike being called for February 11th.
Tensions after a “historic agreement”
A historic agreement between Inditex and UGT/CCOO, reached within the State Round Table, consolidates wage compensation and social benefits after setting a minimum wage of 18,000 euros. Despite the euphoria among employees, Inditex shares fell after this announcement.
Then it was the turn of the employees of the Inditex logistics platform in Meco, who announced protests for better conditions.
The 1,500 employees demonstrated and threatened a work stoppage. After the protests, a preliminary agreement was reached with progressive wage increases of 10.3 percent over three years. The final approval still had to be given by the employees in planned meetings.
Regional conflicts remain
But despite the state’s agreement in February, disputes remained. The FeSMC union of the UGT sued Inditex for breach of the agreement in Cantabria. The dispute centered on pay differences based on seniority. The CCOO announced mobilizations in logistics to demand equal rights. There were meetings from November 6th and a central protest on November 20th. The union sought social dialogue to clarify issues of equality and wage guarantees.
At the end of November, logistics workers intensified their protests again. During the first mobilization in Arteixo, a separate negotiating table was demanded. CCOO criticized Inditex’s lack of commitment for a decade.
A few days ago the CCOO assessed the lack of progress in the negotiations with Inditex. At the recent Comisiones Obreras rally in front of the Zara flagship in Madrid’s Plaza de España, the union assessed the lack of progress in negotiations with the Inditex group. They demanded equal employment conditions for logistics employees and threatened further protests. Plans for a boycott of the general meeting and warnings of increased mobilizations were announced.
This translated post previously appeared on FashionUnited.es