A year of challenges and negotiations: Analysis of 2023 for Inditex

In addition to being one of the leading companies on a national level, the Spanish fashion multinational Inditex Group is undeniably one of the leading companies on a global scale in the sector, from its position as the parent company of popular fashion brands such as Zara, Massimo Dutti, Pull&Bear, Stradivarius or Bershka. At FashionUnited, we take a closer look at the achievements and challenges that marked 2023 for Inditex.

Financial results: an explosive start that stumbled on the home stretch

The Inditex Group kicked off 2023 with a new strategic plan, after posting "record highs" in sales and profits at the close of the previous financial year.

After a first quarter in which sales were positive in all the geographical areas where the multinational operates, through both the physical and online channels, the start of the second quarter was equally positive, with profits soaring by +54 percent.

This upward trend would not only continue, but also improve in terms of percentage growth, in terms of profitability in the first six months of the financial year, during which the group posted a net profit of 2.52 billion euros. However, performance slowed in the third quarter.

Meanwhile, its board of directors agreed to a reduction of chairs following the departure of Emilio Saracho.

Commitment to the environment

After being singled out for the impact of air transport, Inditex teamed up with Atlas Air and Repsol to drive the decarbonisation of the air sector, as well as with Maersk to reduce its GHGs, by sea and land.

After giving a new value to the "Join Life" label, Inditex contributed 15 million to scale up regenerative agriculture models. In 2023, Inditex also set new sustainability targets, promising to be "net zero emissions" by 2040.

Committed to the objectives of its circularity project, in October it bought the first 2,000 tonnes of Circulose fibre. It also sealed an agreement with the International Apparel Federation to drive the transformation of the sector. And together with Jeanologia, it presented a technology that reduces the textile release of microplastics.

Firm steps towards diversity and inclusion

2023 was also the year in which Inditex signed its first Equality Plan and after committing to increase the number of people with disabilities in its workforce, they launched a new shop model in Madrid for its inclusive project For&From. Here, all kinds of professionals with different degrees of disability are employed.

Strategic adjustments and global challenges

The inauguration of a new store, with an investment of 105 million euros on the border between the Netherlands and Germany, also stood out as an important advancement in the strategy of Inditex, which had began to charge 1.95 euros for home returns in Spain, a measure that it was already employing in the rest of its markets.

In Latin America, it restructured its business in Argentina and Uruguay, opting to operate under franchise. The sale of the entire business in Russia was confirmed, while in Burma it announced its exit from the country's factories. In the currently complicated international context, Inditex shops in Israel closed (temporarily) in October, reflecting the challenges in the Middle East region. In Spain, the outlook was strongly impacted by workers' protests.

National strike and initial demands

The Spanish CGT and USO unions called a national strike on 7 January at Zara, Lefties, Kiddy's Class and Pull&Bear, seeking wage equalisation between regions. Although there were local agreements, the CGT extended its demands to the national level, including wage increases and uniform benefits.

Inditex agreed to negotiate global wage measures with UGT and CCOO, establishing the State Round Table for 25 January, in which it considered provincial collective agreements and reviewed the system of commissions.

The measures proposed included a more transparent and equitable incentive and commission scheme. Although CCOO and UGT signed an agreement in November, the "Mesa Estatal" sought to establish the basis for a statewide agreement that would equalise working conditions throughout the Inditex Group in Spain.

In the strike on 7 January, workers from several Inditex chains protested for wage equalisation and improvements. Future mobilisations were announced when there was no response.

On 13 January, protests took place in Valencia demanding fair working conditions and benefits. This action took place before the scheduled negotiations between Inditex and union representatives at state level, bringing forward the talks scheduled for 25 January.

Progress and challenges at the state level table

Negotiations began to address working conditions, the Equality Plan and the State Table on Remuneration. CCOO presented a series of demands, ranging from pay to social issues, advocating for internal promotion, transparency in selection processes and the elimination of barriers for women in the workplace.

The CGT called new rallies for 23 January demanding wage increases, where protesters called for the recognition of social benefits comparable to other areas of the company and protested against being excluded from the State Negotiating Table scheduled for 25 January.

Within 24 hours of the Mesa Estatal, there were more protests in Galicia and Madrid over closures and alleged lack of support from CCOO and UGT.

The Mesa Estatal was constituted on 25 January, addressing wage measures and benefits. A +3 percent advance and renewal of incentives were agreed. Although progress was made, the impossibility of full equalisation was warned. A new meeting was scheduled for 2 February, which did not prevent a national strike from being called on 11 February.

Tensions after a ‘historic agreement’

An historic agreement between Inditex and UGT/CCOO was reached in the State Round Table, consolidating wage equalisation and social benefits, after establishing a minimum wage of 18,000 euros. Despite the euphoria among workers, Inditex shares fell after the announcement.

It was then the turn of the workers at Inditex's logistics platform in Meco, who announced protests for better conditions.

The 1,500 workers demonstrated in May and threatened a stoppage. After protests, a pre-agreement was reached with progressive wage increases of +10.3 percent over three years. Final approval is pending a vote by workers in scheduled assemblies.

Regional conflicts persist

Conflicts persisted despite the state agreement in February. UGT's FeSMC sued Inditex for violating the agreement in Cantabria. The dispute centred on wage differences due to seniority.

CCOO announced mobilisations in logistics, seeking equal rights. There were assemblies from 6 November and a central protest on 20 November. The union sought social dialogue to address issues of equality and wage guarantees.

Logistics workers intensified protests again at the end of November. The first mobilisation in Arteixo sought a negotiating table of its own. CCOO criticised Inditex's lack of commitment for a decade.

A few days ago CCOO assessed the lack of progress in the negotiations with Inditex. In the most recent rally of Comisiones Obreras, in front of the Zara flagship shop in Plaza de España in Madrid, the union assessed the lack of progress in the negotiations with the Inditex Group. They insisted on equal employment for logistics workers and threatened further protests. Plans were announced to boycott the General Meeting of Shareholders and warnings to intensify mobilisations.