World of Fashion
The Inditex Phenomena (Part 2)
(Continuation of Part 1 in The Needle’s Eye, issue June 2025)
by Yvonne Heinen-Foudeh, Senior International Correspondent
A credo pro compensation qua responsible entrepreneurship
As an integral part of its company mission, Inditex defines itself as an agent of change, as expressed in the following statement: “We want to contribute to the battle against climate change by aligning our sector with the United Nations’ recommendations and aspirations, so helping to protect the planet and its inhabitants.” The company was one of the first signatories of the UN Global Compact back in 2021. Building on its achievements of previous years, the Spanish conglomerate has recently updated its ambitious sustainability goals.
These include a 25% reduction in water consumption within their supply chain by 2025, halving emissions in the design and manufacture of products, as well as in their distribution and end-of-life management, and using only textile raw materials that have a lower environmental impact. The long-term objective is to achieve zero net emissions by 2040, reducing their carbon footprint by at least 90% compared to 2018.
Doubtlessly, the Group’s financial strength is being massively leveraged for the significant investments in sustainability and global aid initiatives. Projects span education, emergency relief, and environmental conservation, aligning with the United Nations Sustainable Development Goals (SDGs).
Armancio Ortega, founder and majority shareholder of the fashion imperia and the world's second-richest man, is known for his humble beginnings as a delivery boy for a clothing store. Ortega's journey to success is an inspiring story of hard work, dedication, and resilience.
Inditex key SDG investments – an overviewGlobal Sustainability and Aid Initiatives:• In 2023, the company backed a total of 910 projects, allocating €112 million, positively impacting more than 4.3 million individuals. [Source: annualreport2023.inditex.com]• 2024 Investments: Inditex supported 953 social and environmental projects worldwide, investing €135 million. These initiatives have directly benefited over 4.6 million people, with a goal of reaching 10 million by 2025. [Source: Annual Report 2023]
Textile Innovation and Circular Economy:• €50 Million Innovation Fund: In 2024, Inditex launched a fund managed by Mundi Ventures to invest in startups developing sustainable textile technologies. [Sources: Business of Fashion, Reuters, just-style]
Funding for Sustainable Startups:• Galy: The US-based company produces lab-grown cotton from plant cells. “Galy Cotton” is made using cellular agriculture techniques, resulting in a product that uses 99% less water and 97% less land than traditional cotton, while emitting 77% less CO₂.• Circ, based out of their Danville, Virginia, headquarters, has been working with the Inditex lead brand, Zara, since 2022. Recently, they have jointly released a second collection of clothing made from recycled textiles. • For both Galy and Circ, the parent company of Zara participated in Series B funding rounds, which raised over $30 million each. [Sources: https://circ.earth/about-us/ and https://www.bcorporation.net/en-us/]• Infinited Fiber Company develops Infinna, a textile made from recycled materials that resembles cotton in texture and appearance. [Sources: Vogue Business, Reuters]Environmental and Renewable Energy Initiatives:• Inditex is developing a wind energy facility in A Coruña, Spain, hence at the site where it all began, not far from the head office to this day. Estimated investment: €34 million, aiming to power its headquarters and port infrastructure. [Source: static.inditex.com]• Power Purchase Agreements (PPAs): The company has entered into virtual PPAs totaling 136 MW to promote renewable energy generation. [Source: static.inditex.com]• Material Sourcing Goals: By 2030, Inditex aims for 40% of its textile fibers to come from conventional recycling and 25% from next-generation materials. [Sources: Annual Report 2023, Reuters, just-style]• Regenerative Agriculture: In March 2023, Inditex announced an investment of €15 million in the Regenerative Fund for Nature, launched as a joint venture by global non-profit Conservation International and luxury conglomerate Kering (Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen, Brioni, Boucheron a.o.m.) in 2021. Kering’s Regenerative Fund for Nature supports projects that promote sustainable farming practices. [Sources: Kering, Vogue Business]
Community Investment Policy: The Inditex company policy also emphasizes contributing to community well-being and maximizing value generation, two exemplary projects in this respect.
In January last year, the group brand Zara Home inaugurated its first Portuguese For&From Store, which integrates persons with disabilities, and management was entrusted to the local VilacomVida Association. Located in the Freeport Lisboa Fashion Outlet, near the Portuguese capital, this addition brings the total to 15 stores, including one in Italy, all dedicated to the sale of prior-season Zara Home collections.
April 2025: Inditex partners with the Asian University for Women (AUW) to launch a scholarship program aimed at enhancing educational opportunities for women employed in Bangladesh’s textile factories, committing €3.75 million to educate female garment workers across South Asian states.
Nearing €40 billion in sales sound barrierWhile the reluctance to spend in the face of massive energy cost increases and general uncertainty in the majority of global markets is putting pressure on fashion sales, the industry high-flyer, the Spanish Inditex Group, is celebrating not only its 50th anniversary but also another all-time high. With the end of FY 2024 (January 31, 2025), sales rose by 7.5% to €38,6 billion. Net profit increased by 11% to €5.9 billion.
Gross margin reached 57.8%, while operating expenses remained below sales growth at 6.5%. The company, which is listed on the Madrid Stock Exchange (ETR: IXD1, IPO in 2001), invested €2.7 billion in the financial year in the optimization of its store network, digitalization, and the expansion of logistics. The sales area grew by 5.8 percent, while the number of stores fell by 2.3%. At the same time, online sales increased by 12% to €10.2 billion. All of this has been achieved with a total of approximately 130,000 employees, spanning 170 nationalities.
Marta Ortega Pérez, chairwoman since April 2022 following Pablo Isla, has been instrumental in modernizing the company’s approach, focusing on digital expansion and customer experience enhancements. As the founder’s daughter she learned the business from the ground-up, starting in the Zara store in Chelsea while studying at London’s European Business School with emphasis on international entrepreneurship, followed by numerous subsequent stations. Since 2015, she has been on the board of directors of the Amancio Ortega Foundation.
Oscar García Maceiras lauds an efficient implementation of the business strategy: “The excellent sales and profit figures show the strength of our profitable growth”, the CEO emphasized at the AGM in March. Portrait photos:Inditex
With their Used Clothing Donation & Recycling Program Zara accepts items not only from their own brand but also from third party labels or types of clothing, fabrics, footwear, accessories. Customers can donate at stores by placing them in collection containers. The lead brand with the Inditex empire also offers a donation pick-up service linked to online-orders.
End of March this year Zara Man flagship store opened at Zurich’s exclusive shopping avenue, the Bahnhofstrasse, named most expensive street for retail property in Europe. Photo: yh-f