ARTEIXO – Spanish apparel giant Inditex has confirmed a major scaling of its sustainable production in the past 12 months. New figures suggest the business is on target to retail 118 million garments across all brands under its Join Life label collection in 2018, which flags best practices in the choice of raw materials and production processes – this would mark year-on-year growth of 60 per cent. In this area, Zara launched a new TRF Join Life collection and Bershka expanded the range of products under this label, which currently represents 13 per cent of the brands’ total. Join Life” pieces are made from organic cotton, recycled wool and Tencel, with the label established in 2015 in response to H&M’s Conscious Collection.
Inditex announced the broadening of its sustainable production as it published another set of stellar trading figures for the first nine months of 2018. They showed that net sales at the business increased by three per cent on a year-on-year basis to €18.4bn in first nine months, up seven per cent in local currencies.
The net sales figure marks a record for the nine-month period ending 31 October. The sales growth was accompanied by gross margin expansion of 60 basis points to 58 per cent. Net profit also hit a new nine-month record, climbing four per cent to €2.4bn.
Like-for-like sales in the second half of 2018 to the end of November grew three per cent, following a good start to the season, an extraordinarily warm September and five per cent like-for-like sales growth in October/ November.
These are extraordinary times for Inditex. The company’s near-shoring based model, which sees much of its production take place relatively close to its Spanish HQ– coupled with its best-in-class logistics – has seen the business pull away from H&M in the past two years. While the latter sits on huge inventories and seems stuck in the role of whipping boy for all that is wrong with fast fashion, Inditex continues to quietly ease further ahead of the chasing pack.
Inditex’s chairman and CEO, Pablo Isla, highlighted both “the Group’s strong business model, which continues to deliver solid structural growth in all markets, along with our constant focus on developing the integrated store and online platform through continued enhancement of technology and systems”.
Most notably, Zara is currently selling its collections in 202 markets worldwide following the launch of its global online platform, www.zara.com/ww in November. In parallel, it has completed the rollout of its integrated stock management system in the 49 markets in which Zara operates stores and online.