Inditex is a family-owned conglomerate in the textile sector. It’s holds the rank of 2nd in profit margin for the whole industry in a highly-fragmented supply chain, although this problem is not publicized by the company. It maintains good relationships with the international and national unions but has been failing to provide real health and safety conditions for workers. Inditex has also been called out for paying poverty wages and conditions analogous to slavery in the supply chain even though, in 2016, Inditex’s owner made headlines as the richest person in Spain and the second richest person in the world (coming in just after Microsoft mogul Bill Gates) (Forbes 2016). Other characteristics of note: the brands is sensitive to consumers and social media and the company has not changed the scope of its operations over the years.
According to the company’s 2015 annual report80, net sales were 20,900
million euros in 2015 and 18,117 euros in 2014. Net profit was reported as 2,882 million euros in 2015 and 2,501 in 2014. Inditex’s brands - listed from the most to least profitable and number of stores - are: Zara, Pull Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home, and Uterque. Main markets are located in Europe (44% of sales, excluding Spain), followed by Spain (18%), Asia and “the rest of the world” (23%), and, lastly, the U.S. (15%) (Inditex 2015).
Employees in retail stores increased from 137,054 in 2014 to 152,854 in 2015. As expected, most suppliers are in Asia. Suppliers include workshops in Spain, Portugal, Morocco, Turkey, India, Bangladesh, Southeast Asia, China, Argentina, and Brazil. One of the problems in Inditex’ annual report is that the company does not consider women working in sweatshops as part of the company’s workforce. In fact, suppliers are mentioned in general and there’s no rubric for workers or, if it does mention these workers (at the “manufacturing and logistics” category), it only considers a small part of this workforce (white collar workers directly contracted by the company). In the Inditex’s last report, the company counted 1,725 suppliers, 6,298 factories (658 fabric, 317 cutting, 4,136 manufacturing, 420 dyeing and washing, 213 printing, 554 finishing) (Inditex 2015: 34).
Amancio Ortega (owner) is the main stockholder 59.29%. Gartler SL (50%) and Partler 2006 (9.28%) are the next largest holders.
As part of its corporate strategy, in 2015, Inditex opened up 330 stores, counting 7,013 stores in 88 markets. In 2014, Inditex opened up new stores in 54 countries, increasing the Group's number of stores globally to 6,683, an increase of 343 from the previous year.
80 “This Annual Report has been drafted based on the principles of the United Nations Global Compaq
and the guidelines and principles of the G4 Global Reporting Initiative and the International Framework as well as those principles standards included in AA1000 APS (2008) norm for Accountability. According to these criteria, the report presents all the issues that have an economic, social and environmental impact relevant to Inditex, since they can substantially influence the evaluation and decision making of
stakeholders. These issues are identified and evaluated from a materiality process that involves the main stakeholders” (Inditex 2015: 4).
A possible interpretation of Inditex’s financial indicators (see graph 11 below) is that management is concentrated in HQs with a high level of outsourced supply chains. Inditex’s stock market performance is also a good example of how older white men in the Global North hold power over racialized young working women in the Global South through financialization and corporate governance. Inditex’s stock performance was about 15.5% higher over indexes as Ilbex 35 and Euro Stoxx 50. Amancio Ortega (owner) is the main stockholder 59.29%, and Gartler SL (50%) and Partler 2006 (9.28%) are next in line. These men get rich on the backs of millions of dark and poor workers from the Global South.
Graph 11 – Inditex’s performance at the stock market – Shares – comparison with Indexes (2015)
Source: Inditex Annual Report 2015. Available at:
https://www.inditex.com/documents/10279/208409/Inditex_+Annual_Report_2015_web.pdf/d3501c55- 8e8f-4936-b8d8-0fc47a543c93. Accessed in 21 november 2016.
The board of directors reinforce the argument that power concentration has a unique profile. Inditex’s board is composed of the traditional male, white, and European elite. Pablo Isla Álvarez de Tejera, once a lawyer of Spain, is today Inditex’s Executive Chairman, substituting Amancio Ortega in when Ortega retired. Ortega keeps on as the company proprietary, together with his wife, Flora Pérez Marcote, and the ex-leader of Inditex’s finances, José Arnau Sierra. Among other members there’s Carlos Espinosa de los Monteros Bernaldo de Quirós, a figure that has been historically the directive
team from Inditex (Blanco and Salgado 2004; table 6 below). The board of directors own around 59,36% of the company (Inditex 2016b: annex 1).
Table 6 – Inditex’s board of directors (2015)
Source: Inditex Annual Report 2015. Available at:
https://www.inditex.com/documents/10279/208409/Inditex_+Annual_Report_2015_web.pdf/d3501c55- 8e8f-4936-b8d8-0fc47a543c93. Accessed in 21 november 2016.
Graph 12 – Inditex’s commercial lenders (2012-2015) (euros)
Source: Trading Economic. Inditex - Credores Comercial. Available at:
http://pt.tradingeconomics.com/itx:sm:trade-creditors. Accessed on 29th April 2017.
Inditex’s operations are concentrated in 12 parent companies and 13 subsidiaries through a diversity of activities and joint ventures. Sewing is not considered one of the main activities to the company:
Industria de Diseño Textil, S.A. (“Inditex”), domiciled in Spain (Avenida de la Diputación s/n Edificio Inditex, Arteixo, A Coruña), is the Parent of a group of companies, the principal activity of which consists of the distribution of fashion items, mainly clothing, footwear, accessories and household textile products. Inditex carries out its activity through various commercial formats such as Zara, Pull Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Inditex is listed on all four Spanish stock exchanges and, together with its subsidiary companies, comprises the Inditex Group (“the Group”).
Each format’s commercial activity is carried out through an integrated store and on-line sales model managed directly by the companies over which Inditex exercises control through ownership of all or the majority of the share capital and voting power, with the exception of certain countries where, for various reasons, the retail selling activity is performed through franchises. Certain franchise agreements entered into by the Group include purchase options
which, if exercised, would entitle the Group to lease the premises in which the franchised stores operate and the assets associated with these stores. These options may be exercised after a certain period of time has elapsed since the signing of the franchise agreement.
The Group does not have any significant noncontrolling interests.
The Group holds joint ownership over the entities making up the Tempe Group. Based on an analysis of the contractual arrangements giving it joint control, the Group classified its ownership interest in the Tempe Group as a joint venture. The interest in the Tempe Group was accounted for using the equity method. (Inditex 2016: 176)
Inditex’s main competitors are other retail companies in the fashion industry, such as: H&M, WalMart, and C&A. Inditex is the second largest company in the textile industry in term of profit margin.
Transportation, distribution, and dissemination are all outsourced, since the core activity of the company – according to itself – is to sell and not to produce products at the “Operating leases” section: “Most of the commercial premises from which the Group carries out its retail distribution activities are leased from third parties.” (Inditex 2016: 208).
Based on the brands, Inditex’s customers have a lot of disposable income, might be young depending on the market share (such as Pull Bear), and seem satisfied with the company (Inditex 2016: 31). Complaints in total numbers follow the pattern of each brand size (see graph 13 below). Use of social media to promote the company is a priority Inditex takes very seriously (Inditex 2016: 97).
Graph 13 – Number of messages and calls received by the Inditex Group’s customer services team (2015)
Source: Inditex Annual Report 2015. Available at:
https://www.inditex.com/documents/10279/208409/Inditex_+Annual_Report_2015_web.pdf/d3501c55- 8e8f-4936-b8d8-0fc47a543c93. Accessed on November 2016.
It’s worth mentioning one problem much aligned with the argument of global governance influencing contemporary internacional struggles and social movements, is the social behavior of the company internationally. First, the company asserts that it is aligned with the Sustainable Development Goals (SDGs) and then mentions marginally that it is promoting studies of alignment. It’s hard to imagine this is anything but a public relations move since SDGs are non-binding and aspirational (UNDP 2017; Fukuda-Parr 2016). As a matter of fact, Inditex’s “Strategic Plan for a Stable and Sustainable Supply Chain 2014-2018” is full of items mentioned at the “governance struggles” in this dissertation and the “problems with private agreements” (some pages ahead): they are all non-binding and aspirational. They are all principles that companies can claim to “aspire” (Inditex 2015: 38) but not actually reach in practice, such as:
● United Nations Guiding Principles on Business and Human Rights of 2011; ● Sustainable Development Goals approved by General Assembly in 2015; ● The United Nations Universal Declaration of Human Rights;
● United Nations Guiding Principles on Business and Human Rights, which developed the “Protect, Respect and Remedy” Framework principles informally known as the Ruggie Framework;
● Principles of the United Nations Global Compact;
● Fundamental labour standards deriving from the Conventions and Recommendations of the International Labour Organization;
● ETI Base Code of the Ethical Trading Initiative;
● Framework Agreement with IndustriALL Global Union.
These regulatory frames are a mixture of Health and Safety, living and working, and environmental81 measures.
Finally, the company’s policies for employers are directed mostly to protect their white collar workforce. There’s no mention of outsourced workers or suppliers. Their outlined “Developing everybody’s talent” (emphasis added) policies reach workers at stores (87% of the workforce), central services (7%), logistics (5%) and a gray area of manufacturing (1%). They include programs such as InTalent (a system for updating CVs), Project Go! (aimed at young workers, training for internal teams, Attracting talents (collection of information from candidates), remuneration policies (profit-sharing), INet APP (tech app development), equal opportunities program, Occupational Health and Safety (with a platform of information).
81 Safe to wear and Green to wear, Forest Product Policy, Animal Welfare Policy are some other specific