2019 Annual Report


Letter from the Chairman

Pablo Isla

Pablo Isla

Dear friends of Inditex,

When I addressed all of the employees who make up the Inditex family and the media back in March 2020 in order to outline our response to the covid-19 pandemic, I called for three things: solidarity, composure and trust.

Solidarity first and foremost with all of the people affected by this pandemic. Composure so as to remain strong in the face of what is surely the most serious crisis in recent history on account of its global ramifications. And trust. Trust in the future, assured that this is a situation we are going to come through together.

My own confidence in the future has been powerfully bolstered by the attitudes I have observed among the entire Inditex workforce. I would like to personally thank each and every one of our professionals. Their unwavering commitment throughout the health crisis has been effective and, more than anything, inspiring: our people have once again given us a lesson in engagement, camaraderie, solidarity and dedication. You will have heard me say over and over again how people come before everything else here at Inditex and recent events demonstrate that.

“People have been the absolute priority in our response to covid-19”

In spite of the current situation, this annual report must reflect on 2019. The truth is that, despite having been overshadowed by the events of 2020, 2019 provides a vital snapshot of the continued resilience of our business model. Our financial performance was better than ever, even as we continued to deliver on our community and environmental ambitions.

Sales revenue grew 8% from the year prior year as customers responded enthusiastically to the creations of our design teams.

Underlying net profit was 12%, reduced to 6% only due to the decision to recognise an impairment provision of €287 million at the onset of the crisis in anticipation of the impact of covid-19. We reinforced the rollout of our store and online integrated platform, which now spans 200 markets worldwide, following €1.2bn in capital expenditure. Meanwhile our global tax contribution reached €6.75 billion, €1.87 billion of which in Spain, implying an effective tax rate of 22%.

It is worth underscoring our robust financial position at year-end 2019, namely net cash of €8.06 billion (+20% year-on-year), further evidencing that we are on the right strategic track, corroborating the effectiveness of our integrated stock management approach and endorsing our financial discipline.

We remain firmly committed to ensuring our business activities add value for society and the environment. At the last Annual General Meeting it was agreed to set up a Sustainability Committee within the Board of Directors and a raft of new sustainability targets were announced. Those targets include the elimination of single-use plastic from customer interfaces by 2023; the recycling of all waste generated in our facilities, also by 2023; and the use of only sustainable man-made cellulosic fibres such as viscose by 2023, and the use of only sustainable, organic or recycled cotton, sustainable linen and recycled polyester all by 2025.

Spots “2019 provides a vital snapshot of the continued resilience of our business model”

By the end of 2020, all of the company's stores will have used-clothing collection containers. The clothing collected is being donated for reuse or recycling in collaboration with 45 local NGOs in the various markets, including Caritas, the Red Cross and Oxfam.

All of the Group's brands have undertaken important strategic initiatives related to this sustainability strategy and the garments distinguished by the Join Life label will account for 25% of the total by end of this year.

We also boosted our research effort in 2019, most notably with a €3.5 million collaboration with MIT covering the promotion of research driven by global sustainability challenges, including new recycling and upcycling techniques, among other aspects.

Our community engagement drove us to make the full force of our logistics capabilities available to assist with the health emergency in 2020. We set up an air traffic corridor with China which was initially used to get aid to that nation, the first to suffer from the epidemic, and later facilitated the transportation of over 120 million items of health equipment to Europe during the peak of the crisis.

That sense of responsibility similarly materialised in our commitments to our suppliers, such that we did not cancel orders and upheld our payment terms. With them in mind, we also backed an initiative jointly with the International Organisation of Employers, the International Labour Organization, IndustriALL Global Union, nternational Trade Union Confederation and major international apparel brands in support of garment workers, particularly in markets with less robust social protection systems.

“We remain firmly committed to ensuring our business activities add value for society and the environment”

Our commitments encompass and are guided by the United Nations 17 Sustainable Development Goals to ensure we have a positive impact on the societies in which we operate. We say so at a time when it is vital to reassert the United Nations Global Compact, to which we are adhered, and the UN Guiding Principles on Business and Human Rights, fully embedded into our conduct as an enterprise.

The past few months, during which virtually all of our stores around the world - 7,469 as of year-end - were closed for weeks, have enabled us to observe how some of the trends that shaped our integrated stores and online platform strategy have accelerated.

For that reason we have decided to commit even more decisively to our plans for fully integrating our stores and online business over the next two years. We will reinforce and expand the online presence and RFID technology across all eight of our brands.

In line with the strategy pursued in recent years, we will continue to open larger, high-tech stores, extend and modernise existing stores and absorb smaller stores less well positioned to offer our customers these new integrated services.

This strategy is transforming our Group and preparing us for emerging opportunities that are bound to emerge, moving us closer to our goal of becoming a fully integrated, fully sustainable and fully digital Company.

Many thanks.

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in sales


online sales

Selling in





Join Life garments


In 2020


garments’ analysis











of our global electricity consumption coming from clean sources




stores with clothing collection programme



in tax contribution



in corporate community investment


direct beneficiaries


Stroke man

At Inditex we help our customers use fashion to tell their story through a unique and sustainable experience.

People, at the forefront of our transformation

At Inditex, people lie at the heart of the Group's growth and transformation. Their values are what make it possible for us to offer responsible and quality fashion, framed by an unbeatable shopping experience. The more than 176,000 people of 172 different nationalities who make up our team mirror what we stand for and evidence our commitment to equal opportunities and professional growth. At Inditex, women account for 76% of our headcount and occupy an even higher 79% of our management positions. And some 25% of new hires in our corporate teams hail from professionals promoted internally from our stores or logistics centres.

Innovation in the customer experience

We view our relationship with our customers as something truly unique. Our aim is to satisfy their needs in a simple, quick and efficient way. We strive to deliver what each is looking for at any given time by offering an innovative experience that goes beyond the channel and medium. In that integrated offering, which was introduced in 18 new markets in 2019 so that it currently reaches 66 of the 96 countries in which we have stores, technology is the prime enabler and data processing using innovative analytical systems is key to decision-making.

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We aspire to be part of everyday and extraordinary moments, durable.


Sustainability is embedded into our products' entire life cycle, starting with the creation process, which seeks to extend the useful life of products and materials and maximise the scope for recycling them. All of our designers will have received training on the circular economy by the end of 2020.

Selection of materials

We pay special attention to the raw materials we choose for our products. In 2019 we stepped up the use of more sustainable fibres: we increased the use of recycled materials by 250% and of sustainable cotton by 105%. We continue to make progress on our target of having 100% of our cellulosic fibres be sustainable in 2023. This year, 25% of our fashion offering will be represented by Join Life garments, made using more sustainable raw materials and more environmentally-friendly production processes.

Product health and safety

Last year we updated our stringent health and safety standards for clothing, footwear, accessories, cosmetics and items that come into contact with food. To ensure their application throughout the entire productive process, we carried out more than 56,000 inspections entailing over 890,000 analyses. The compliance rate was higher than 97%. We also carried out audits to verify the accuracy of the external labs that performed those analyses.

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Spot 01 Spot 02

Forward-looking and committed stories.

Social management of the supply chain

In 2019 we launched a new strategy designed to respond to the needs of the people working for the manufacturers of our supply chain and create social value in their communities and in the broader garment industry: “Workers at the Centre 2019-2022”. That new approach to tackling the challenges posed by a global supply chain is articulated around seven priority lines of initiative and already benefitted more than 1.4 million workers last year. In parallel, we conducted 12,215 audits in order to continue to help our suppliers and manufacturers to comply with the stringent labour conditions stipulated in our Code of Conduct.

Environmental management of the supply chain

We are making progress towards delivery of the Zero Discharge of Hazardous Chemicals (ZDHC) target in 2020. Key to the progress made on that front are the 1,776 environmental evaluation audits carried out since 2014 to foster the sustainable and efficient management of the factories that make heavy use of water (washing, dying and printing facilities) and the choice of the most appropriate chemical products for production purposes. A specific in-house initiative - The List - classifies 23,373 chemical products sold by 24 manufacturers.

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Aiming to spearhead change.

Decarbonisation and circularity

Our objective is to contribute to delivering a climate-neutral, resource-efficient and competitive economy.

Eco-efficiency is a management priority across our head offices and logistics platforms, our transport and distribution operations and our websites and stores (92.67% of our owned stores meet the Eco-Efficient Store Manual). Thanks to that end-to-end approach, 63% of our overall energy consumption in 2019 came from clean sources. We also managed to reduce our scope 1 and scope 2 greenhouse gas emissions by 35% per m2.

Last year we accelerated our transformation in terms of circularity. We fostered the reuse and recycling of garments, packaging and waste. For example, our used-clothing collection scheme is up and running in 2,299 stores in 46 markets; we used 14,000 tonnes of our own recycled cardboard to make new boxes for dispatching online Zara orders; and 91% of the waste generated in our headquarters, logistic centres and own factories was handled by experts.

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In an ethical way.

Tax transparency

Our total tax contribution amounted to €6.75 billion in 2019. Of that sum, €3.04 billion took the form of direct taxes and €3.71 billion were indirect taxes collected. Our tax reporting effort is transparent, in keeping with the OECD's Guidelines for Multinational Enterprises. We analyse our contribution throughout the value chain and explicitly renounce opaque tax practices and structures.

Robust compliance architecture

Our corporate ethics culture is an essential part of our Compliance Model, which articulates our compliance system while evidencing our unwavering commitment to good governance and sustainability practices, which we foster among all of our stakeholders.

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To grow as we help those around us to grow.

Working for the community

We view community investment as an opportunity to contribute to the United Nations 2030 Agenda for Sustainable Development, leveraging and earmarking our corporate resources - monetary, in-kind and our employees' time and know-how - to projects in the fields of community wellbeing, education and humanitarian aid. In 2019 we gave €49 million to 670 initiatives that benefitted more than 2.4 million people; we donated 3.2 million items of clothing to charitable causes; and employee volunteering amounted to 122,000 hours.

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As partners.

Thinking about the shareholders

We foster transparency policies and communication channels so we can listen to our shareholders and create value for them, underpinned by a balance between constant reinvestment in the Group's growth, having a positive impact on our surroundings in the broad sense and payment of an attractive and predictable dividend.

Partnerships and collaborations

We engage in constant, open, two-way communication with numerous institutions from many areas of society. It is vital to strike collaborations and alliances with our various stakeholders in order to advance towards delivery of the Sustainable Development Goals enshrined in the United Nations 2030 Agenda.

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2019 Annual Report (complete version)

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Our sustainability model indicators

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Annual Accounts

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