Inditex CEO’s “four pillars” of retail
Inditex chairman and CEO, Pablo Isla, wrote an op-ed on his “four pillars of retail” for the Wall Street Journal recently. While the company’s share price has been sluggish this year, there is no doubt that it remains the dominant force in the fast fashion world – leading brand Zara particularly. As a result, investors were eager to read what he had to say.
According to Isla, the retail industry’s first pillar is talented people that can maintain a brand’s creativity and productivity. Today, this means nurturing progressive values like gender equality, diversity, and inclusion. This ensures that people are picked from the biggest talent pool possible, helps creative people feel nurtured, and makes sure that no options are off the table.
Isla’s second and third pillars may as well be called “the Inditex effect”. The second is an ability to meet consumer demand for the “latest fashion trends with the best quality” that requires a “manufacturing process that also embeds the best social and environmental sustainability practices into the supply chain.” The third is technology to let consumers move seamlessly across platforms.
Inditex is a great example of these capabilities working in tandem. It utilises sophisticated technology to react instantaneously to customer demand in-store, ensures top quality and top-speed in its supply chain by sourcing goods from Spanish factories close by its retail outlets.
The fourth, and final, pillar of the retail industry is sustainability. This has become a core feature of Inditex’s proposition, and is clearly close to Isla’s heart. Noting, in his op-ed, that modern consumers wouldn’t stand for anything less, he explained how crucial sustainability is to modern business, writing:
"It also means boosting the sustainable origin of raw materials; ensuring the reusing or recycling of textile products at the end of their life cycles; designing eco-efficient stores; achieving rational and fair use of water; and eliminating waste in a smart manner. Simply put, it means embedding the principle of the circular economy into corporate strategy."
Dominion holds Inditex in its Global Trends Luxury Fund.
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