Inditex has hailed the strengthening of the group's commitment to sustainability along the value chain in 2016, with chairman and CEO Pablo Isla highlighting "solid, sustainable, and integrated growth" as key to the future of Inditex.

During the company's Annual General Meeting yesterday (18 July), Isla detailed Inditex's sustainable growth strategy, which he said reached all stages of the value chain last year thanks to its Closing the Loop initiative, which is designed for reusing and recycling textile products.

The initiative is core to the group's strategic commitment to the circular economy concept, and in its first year has enabled the collection of over 7,100 tonnes of garments, footwear and accessories thanks to special containers placed in the company's stores, offices and logistics platforms.

These end-of-life initiatives are currently being carried out in 534 stores and eight markets (Spain, Portugal, UK, Ireland, Netherlands, Denmark, China and Sweden). The plan is to increase the number of collection points and countries involved going forward.

Meanwhile, Inditex's commitment to sustainability and responsible sourcing is also evident in the use of more sustainable raw materials and more sustainably made fabrics, which have formed the basis of collections such as Zara Join Life and Oysho Weare the Change. "A selection of more than 44m particularly sustainable garments featuring special labels", explained Isla, who announced that "all of Inditex's brands will join this initiative". 

Zara launches eco-friendly Join Life collection

Inditex's shareholders approved the group's performance in 2016 - a year in which its points of sale surpassed the 7,200 mark in 93 countries and 41 online markets. Group revenue grew 12% to reach EUR23.31bn, underpinned by growth in all the regions in which it does business, while net profit amounted to EUR3.16bn, a 10% increase on earnings of EUR2.88bn a year earlier.

The group's ongoing international expansion, borne out in the flagship stores launched across its geographies by Inditex's brands in 2016 and the first half of 2017, set the backdrop for Isla's explanation of its "solid growth model". This model has yielded topline and same-store sales growth of 69% and 37%, respectively, over the past five years, with positive results in all regions.

As part of the ongoing international expansion of its integrated store model, Isla confirmed that Zara will launch its online store in India this October. In addition, the group expects to open its maiden Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home stores in Belarus in August.

The Inditex chief also sought to underline the group's commitment to investment, flagging capex of EUR1.43bn in 2016 to put the total at "over EUR7bn during the last five years". Of this total, "more than EUR1bn has been earmarked to technology upgrades" over the same timeframe.

On the innovation front, Isla highlighted the deployment of RFID technology, whose rollout across the Zara store base was completed in 2016 and is ongoing at Massimo Dutti and Uterqüe at present. This technology is expected to be introduced across the rest of the group's retail concepts in 2018.

Meanwhile, investment in logistics in the last five years has topped the EUR700m mark, enabling "the development of very advanced high-tech areas known as multi-shuttle systems" at the Bershka platform in Tordera and the distribution centre in Arteixo, La Coruña. This technology is enabling "more efficient management of dispatch times".