Spanish fast fashion giant Inditex expects 10% of its products to use recycled or organic fabrics

Zara's parent company, Spanish fast fashion giant Inditex, expects 10% of its products to use recycled or organic fabrics to foster consumers' habit of wearing environmentally friendly recycled garments.

Recently, Inditex announced that it has teamed up with the Massachusetts Institute of Technology (MIT) to develop new high-quality recycled fabrics as an important step in the company's 2020 environmental strategy.

The R&D project was funded by Inditex, and MIT will host a competition for R&D teams in Spanish universities. The winning team won the funding and received expert support from MIT to develop the new eco-friendly fabric. According to Inditex, the company hopes to bring together experts in this field to develop new recycling technologies and fabrics.

In terms of recycling old clothes, Zara has reached an agreement with the charity Caritas to recycle the old clothes that customers have purchased in the public storage box of the online store. Caritas recycles 25,000 tons of used clothes each year, including 180 tons from Inditex. Some of them are sold to consumers in the form of second-hand goods, while another part of Inditex is recycled into new fabrics.

Inditex has also partnered with Caritas to set up 2,000 storage boxes in public areas to recycle used clothes. The charities that work with them include: Oxfam and the Red Cross.

In addition to using recycled fabrics, Inditex also wants to apply more sustainable raw materials, including:

Organic cotton grown without pesticides and fertilizers,

Lenzing man-made cellulose fabric made from recycled cotton and wood pulp,

Reclaimed yarn from Hilaturas Ferre, made from recycled cotton.

Inditex's plan to use recycled fabrics is part of the “Circular Economy” program, with the ultimate goal of reducing the environmental impact of all processes from garment production to store operations: by 2020, 100% of stores will be environmentally friendly and reduce carbon emissions by 55%.

Inditex Group

The Inditex Group is a global leader in apparel sales with a headquarters office in La Coruña, Spain, where more than 500 professionals work for each of the group's subsidiaries, design, production and sales.

The group was originally founded in 1963 to produce women's pajamas and women's underwear for apparel wholesalers. In 1975, the company was forced to open its first retail store in La Coruña because a German customer cancelled a large order. The original intention of opening a retail store was to sell the inventory after the wholesaler canceled the order, but this experience made Inditex recognize the importance of maintaining a good relationship between the manufacturer and the retail company. Since then, the company has started a new development process. As a senior executive manager stressed in 2001, "For Inditex, the key is to have both hands hard, both to capture the factory production and to grasp the market sales, to grasp the customer's feelings."

From six chain stores in 1979 to the 1980s, Inditex has established chain stores in all major cities in Spain. In 1988, the first overseas chain was established in Portugal, followed by a chain store in New York in 1989 and Paris in France in 1990. Large-scale international operations began in the 1990s, and the Inditex Group entered 29 countries in Europe, the Americas and Asia (especially between 1998 and 2001, entering 21 of 29 countries). Along with international operations, the Group began multi-brand operations (such as Pull, Bear, Massimo Dutti, Bershka, Stradivarius) to meet the needs of different market segments. Each brand operates independently, with its own chain of stores, ordering systems, warehouse and transportation systems, different distributors and organizational structures. But each brand operates around “providing affordable fashion,” with the same management model and unified supply chain control to maximize market responsiveness.

However, people really started to pay attention to ZARA and Inditex. In 2001, Inditex sold 25% of its shares, and the subscription amount on the day of the issue exceeded 26 times of the circulation. Only this one raised funds for the company. One hundred million euros. At that time, ZARA's sales accounted for 80% of the company's total sales. Inditex stocks can be sold so hotly that they are so popular with investors, mainly thanks to ZARA, which has a profitable business model in addition to its better profitability than its competitors.

After raising funds through the international market, Inditex began a larger expansion plan. After the first public offering in 2001, the company did not leave any cash, all for expansion. The Inditex Group uses a "negative working capital" business model in which the company's cash income is greater than the cash it spends. From the development of Inditex Group's sales scale, we can see the success of this business model, sales rose from 367 million euros in 1991 to 3.25 billion euros in 2001, while net profit also rose from 3100 million euros in 1991 to 345 million euros. In 2001, many companies in the industry faced the dilemma of sales decline, but the Inditex Group's sales increased by 27% over the previous year, and profits increased by 32%.

By 2002, the Inditex Group had opened 1,284 chain stores in 39 countries around the world. On May 21, 2004, Inditex opened a store in Hong Kong, which is its 2,000th branch in the world. As of 2006, Inditex has become a group company with a market capitalization of more than $8 billion. It is the number one and the third-largest clothing retailer in Spain, with more than 2,500 stores in more than 60 countries. It owns clothing retail brands such as ZARA, Pull and Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, ZARA Home and Kiddys Class, among which ZARA is the most famous and the flagship brand of Inditex Group.

As the flagship brand of the Inditex Group, ZARA was founded in 1975. It is both a clothing brand and a chain retail brand specializing in ZARA brand clothing. At present, ZARA has more than 1,000 branches in 60 countries around the world, and it is growing at a rate of about 70 per year. Although the ZARA brand chain accounts for only one-third of all Inditex stores, its sales account for about 75% of the company's total sales.

For more information, please pay attention to the world clothing and footwear network information report.