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Inditex’s Sustainability Investment Reaches €7 Million in 5 Years

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Image Courtesy: inditex.com

Inditex, world’s leading fashion group which operates over 7,000 stores in 88 markets and owns brands like Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe, has invested more than Euro 7 million on sustainability front over the last five years.

The Group has invested in expansion, scaling and modernization of logistics platforms and design centres to boost efficiency and energy saving measures. The start-up of highly-advanced “multi-shuttle” areas at the Bershka platform in Tordera, Barcelona, and at the Arteixo distribution centre (A Coruña) make dispatch time management more efficient and precise and double the speed.

Another area was research and development work focused on store applications for sustainable technology, such as paper saving mobile payments and efficiency technology RFID. Last year, it completed the deployment of RFID technology across its entire Zara store base and has embarked on the process of rolling this technology out in its Massimo Dutti and Uterqüe stores. Other brands like Pull&Bear, with Stradivarius, Bershka and Oysho will follow in 2018. Besides, the number of eco-efficient stores worldwide reached 4,519 in 2016 delivering water savings of 40% and energy savings of 20%.

Furthermore, it also introduced mobile payments in 15 markets in total since it started to roll-out in Spain, the UK, US, Italy and France. Using the online apps of each of Inditex’s eight retail concepts or using a Group app called InWallet facilitate the environmentally responsible replacement of hard-copy receipts with e-receipts. Online orders placed in Spain with any of the Group’s brands have no longer generated hard copy receipts since March 2017 thanks to the e-receipt system named “Paperless”. Zara is also already using this system in the US and the UK.

The Green to Pack project at Zara alone save 22,000 trees and the emission of 1,680 tonnes of carbon every year. In addition to this, it also introduced clothing containers for used-garments in all Zara stores in Spain, Portugal, the UK, the Netherlands, Denmark and Ireland for recycling into new fabrics.

The research and development of more sustainable fabrics is also increasing. Last September Zara launched the second edit ion of its Join Life collection made of Refibra™ fibres. Developed by Austria’s Lenzing Group, Refibra™ fibre are made of pulp from cotton scraps and from sustainably-managed forests.

*This story first appeared on Apparel Resources

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H&M, Zara Grapple With Sustainability Trend This Holiday Season

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Photographer: Akos Stiller/Bloomberg

Apparel chains such as H&M, Zara and Forever 21 conquered the retail world by promising fast fashion: cheap, trendy and disposable.

Yet there’s a growing number of consumers this holiday season who want just the opposite. Data shows that shoppers — especially millennials, the target market for fast-fashion companies — are increasingly looking for clothes made of higher-quality materials or they’re keeping their existing clothes longer. Some are even seeking apparel that’s been reused or recycled.

More than 14 percent of U.S. consumers looked for apparel and accessories made from natural materials in 2016, up from 12.9 percent last year, according to a Euromonitor International survey. Shoppers looking for clothes that were reused or recycled rose 2 percent this year. And more millennials looked for “sustainably produced” apparel and accessories than any other age group.

This shift to so-called sustainable clothing is threatening the underpinnings of a fashion industry that wants consumers to rapidly change styles and move on to the next hot trends.

“Certainly fast-fashion companies are doing a booming business, but there’s also an increased interest in vintage, learning how to sew and weave, and in repair and mending,” said Susan Brown, a fashion expert who serves as associate curator of textiles at the Cooper Hewitt Smithsonian Design Museum. “There’s the Brooklynization of the world — interest in higher-quality, handmade things that have a narrative story.”

Holiday Trend

The challenge may come earlier than big retail chains expect. Consumers are more willing to shop at niche, smaller companies this season, according to Deloitte LLP. Some of these retailers tout sustainable premiums for longer-lasting, higher-quality products — think, Zady or Everlane.

Zady’s Wrap Coat. Source: Zady

“People want to buy trends less and less,” said Jennifer Baumgartner, a clinical psychologist and author of “You Are What You Wear: What your Clothes Reveal About You.” “It seems they’d rather buy items that are classic and will last a long time. The movement is happening, and it’s been gaining ground in the public eye.”

She said it’s going to be difficult for the fast-fashion concept to use high-quality, eco-friendly fabric and not create “mass waste.”

But fast-fashion companies are trying to respond. In 2013, H&M launched a worldwide garment-collecting initiative encouraging consumers to reuse and recycle their clothes. The chain also sells a “conscious collection,” a clothing line created entirely from sustainable materials. Zara launched its first sustainable line, Join Life, in September. The collection consists of simpler designs and clothing made from recycled wool, organic cotton and Tencel — a fabric that includes regenerated wood.

Small Amount

But these pieces make up just 1.5 percent of Zara’s assortment and 3.5 percent of H&M’s, said Emily Bezzant, head analyst at the fashion-tracking firm Edited. And the very nature of high-turnover fast-fashion companies strikes many as unsustainable, she said.

“Generally, fast fashion and sustainability are not a match made in heaven,” Bezzant said. She said the biggest challenge for retailers will be to make sustainable products affordable and accessible to millennials.

There’s been some progress toward that end. H&M’s Conscious Collection has an affordable median price of $17.99. At Zara’s Join Life line, a basic strappy top cost $9.90 — the same as their main line, Bezzant said. Lowering prices for sustainable collections would help these businesses stay relevant, as most consumers shop at H&M and Zara because of the cheap price tags.

‘Too Poor’

Still, some in the industry are pushing the notion that millennials will save money by spending a bit more on longer-lasting items. Consumers are starting to realize when they are “too poor to buy cheap ,” said Maxine Bedat, chief executive officer of Zady, a clothing site known as the “Whole Foods of Fashion.”

“The issue that we’re facing as a society is that 150 billion new articles of clothing are produced globally every single year,” Bedat said. “The challenge is to produce clothing at the design side of things that people want to wear more than seven times.”

Christina Kim, a designer who displayed her work at a Cooper Hewitt exhibit on sustainable fashion, said it’s actually been more economical for her to use recycled scraps to make her clothing. Kim founded Los Angeles-based Dosa after moving from Seoul. Her idea started in West Bengal, where she began collecting old saris to incorporate into new designs.

Kim tracked her expenses in both regular and recycled production. She found that when using recycled fabric, she was able to spend less on materials — but had to shell out significantly more for labor. With traditional clothing production, 40 percent of her expenses went to materials, 53 percent to labor, and 7 percent to shipping and other duties. With a recycled production, Kim spent 14 percent on materials, 81 percent on labor, and 5 percent on shipping and duties.

The big companies are taking steps in a similar direction. H&M, for instance, has started minimizing waste during textile production.

“Any leftover material or post-manufacturing waste is recycled into new materials such as recycled wool or recycled cotton,” said H&M spokeswoman Anna Eriksson.

“The customer interest in sustainability is growing,” she said. “We believe sustainability is the only way forward if we want to continue to exist as a fashion company.”

*This story first appeared on Bloomberg

How Mass Retailers are Traversing Big Transparency

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Transparency is trending in fashion.

Mass retailers like H&M, Zara, UK-based Marks & Spencer, Belgium-based CNA and Gap Inc., which owns Gap, Old Navy, Banana Republic and Athleta, have begun sharing the names of the factories they work with in an effort to improve working and environmental conditions, streamline cluttered supply chains, and get on the right side of the mindful consumer. This is a departure from traditionally standard retail practices, which saw companies keeping their factory names closely held in order to protect themselves from competition.

The timing is right: Corporate brands are looking to become more transparent during a moment of increasing customer consciousness. Transparency is, on some level, a feel-good buzzword for an industry plagued by environmental and ethical issues, as becoming more transparent doesn’t require as much internal overhaul as becoming more sustainable. And it’s not for nothing: When retailers identify what factories they work with, as well as what compliance guidelines they follow, it can help improve worker conditions and bring manufacturer malpractice to light.

“The supply chain is really complicated, but it’s a positive step from a global labor union perspective to be transparent,” said Christina Hajagos-Clausen, textile and garment director of global union IndustriALL, which has contracted agreements with H&M and Zara. “Customers appreciate it, as well. If you have nothing to hide, you can show it.”

But as big brands take steps to bring their supply chains out of the shadows, they haven’t trumpeted that message as loud-and-proud as one would expect. Gap Inc. announced its factory list in a bland investor relations announcement. H&M and Zara share some updates on the subject on their social media accounts, but they’re sporadic enough to get buried by product posts and lifestyle content.

Compared to brands like direct-to-consumer retailer Everlane, these brands have kept transparency volume to a whisper. Everlane’s entire brand ethos is predicated around transparency: Its motto is “Radically Transparent,” and it hosts “Transparency Tuesdays” Q&As on Snapchat. In addition, it takes customers on video tours of new factories. The pricing structure for every product is laid out online, and interested customers can read about each of the 17 factories Everlane works with on its website.

Customers have clearly embraced this share-everything approach to retail. Everlane grew its revenue by 200 percent year-over-year in 2015, according to Bloomberg, and the brand does little marketing, accruing a customer-base mostly around mission-driven word of mouth.

But Everlane’s “radical transparency” is missing key specifics. Factory names aren’t disclosed, and the company adheres to a list of unspecified “compliance guidelines” when sourcing new factories. Meanwhile, Gap, Zara and H&M all have named factories and detailed compliance guidelines on their investor sites.

Founder and CEO Michael Preysman said in an email that the reason Everlane doesn’t disclose its factory names is that factory partners have asked them not to.

“Everlane makes products in the same factories as luxury brands,” he said. “We make the same quality product as these other brands, pay the same cost, but charge a much lower markup. We may jeopardize their business.” He added that when factories allow, the names are shared. Such factories currently include Nobland in Vietnam and Mola in Los Angeles.

Preysman said that Everlane’s requirements for factory transparency include being able to document them, share what products are made there and complete audits on worker health, pay, safety and paperwork. However, in leaving some aspects—like their names—open-ended, Everlane’s practices are subject to interpretation.

“Not releasing factory names makes you less accountable if something happens,” said Natalie Grillon of Project Just, an online resource for customers wanting to find out how and where clothing from different brands is made. “They say it’s for competitive reasons, but in reality, a lot of these factories produce for multiple brands at a time. It’s more about protecting yourself.”

Customers of Everlane and other brands like American Giant and Reformation that built their brand messages on the back of transparency and conscious shopping appreciate the respite they offer from corporate facelessness. So as such corporations as Gap and Zara make transparency efforts, customers are repelled. A message of transparency from a fast fashion brand lacks the magic word: authenticity. When you’re H&M, firing off a tweet about sustainability efforts falls on highly skeptical ears.

“H&M comes under fire a lot for their initiatives because they do publicize it,” said Grillon. “When really, they’ve made a ton of effort in support of better wages. But then they talk about it a lot, and then they come under fire a lot for anything at all that goes wrong.”

Small brands looking to break the unsustainable retail system are the underdog, so customers are more willing to work through the problematic issues with them, said Grillon. For corporations, not so much. Grillon said Gap is hesitant to flaunt its transparency efforts because, unless they’re perfect (which, thanks to the messy state of retail’s supply chains, is impossible), they’ll receive backlash. It’s also hard to trust that bigger brands aren’t falling back on transparency in lieu of sustainability.

“Transparency is a means to an end,” said Bayard Winthrop, founder and CEO of American-made brand American Giant. “We believe it has to be part of our value system because the customer is going to find everything out. But being transparent isn’t the end goal.”

Without a believable value system in place, big retail is hard to pass off a message beyond anything other than profit.

“When you talk about ethical fashion, you’re talking about working toward better conditions, higher wages, fewer chemicals,” said Grillon. “That’s going to require raising prices, and that’s a hard pill to for brands to swallow.”

*This story first appeared on Glossy

Know more about transparent supply chains and Everlane’s ‘Radical Transparency’ here

Zara Launches First Sustainable Fashion Line

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Fast-fashion retailer Zara is trying its hand at sustainability with a new fashion line made using environmentally friendly materials.

The push by Zara, which has nearly 2,000 stores in 88 countries, is indicative of the continued push for increased transparency in retail, and demonstrates the importance for retailers to commit to sustainability, according to Brooke Blashill, svp and director at Boutique@Ogilvy.

“As any retailer is planning for the next generation of customers, and its business in general, sustainability and social impact have to be a top consideration, and it’s positive to see Zara take a step to improve its supply chain,” she said.

According to the Zara site, “the collection embraces a woman who looks into a more sustainable future” and is made with materials like organic cotton, recycled wool and Tencel, a recycled fabric derived from wood cellulose. Zara says that its Tencel is sourced from sustainably managed forests and that the farming process for its organic cotton uses 90 percent less water than usual cotton.

It’s a tenuous stance given Zara’s role in perpetuating the trend of cheaply produced goods, typically made from easily procured materials, sold at a low price point. Kathleen Wright, founder of Piece & Co., said in the Glossy Podcast in August that it’s nearly impossible to reconcile sustainability with fast fashion and still turn a profit, making environmentally friendly efforts incongruous to the brand identity of companies like Zara.

“Wouldn’t it be a dream if [fast fashion retailers] stood up and said, ‘we are going to do one less delivery this year, we’re putting too many clothes out there, and we’re going to take a profit cut?’,” she said. “The race to the bottom in my opinion is very real.”

The Spanish company is also launching a social campaign using the hashtag #JoinLife that includes “Boxes with a Past,” a selection of artists on the site creatively transforming Zara cardboard boxes into works of art. Zara lso launched a series of clothing collection receptacles at 300 locations in Europe for consumers to drop unwanted clothing of any brand, with plans to expand the effort to Asia and North America in 2017.

Users can also request free clothing collection in Spain and additional clothing will also be donated to the Red Cross and Oxfam, as well as to textile projects at the Massachusetts Institute of Technology and Lenzing, an Austrian based company focused on sustainable fabrics.

Blashill said focusing on environmentally friendly offerings is an increasingly important focus for retailers like Zara, noting that a recent Nielsen study found that 75 percent of millennials would be willing to pay extra for sustainable offerings. Competitor H&M launched its own Conscious line back in 2012.

The move also comes on the heels of retailers making increased pushes towards transparency, including Gap announcing earlier this month that it would disclose its full global factory list. Wright told Glossy in a previous article that efforts like these help create a domino effect of other brands enacted sustainable efforts.

“When a big brand steps forward like this it’s exciting because it shows that if a company at this scale can make a change like this, other more nimble companies can do the same,” Wright said.

*This story first appeared on Glossy

Fast Fashion Attempts an Environmental Makeover

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Retailers tackle the eco footprint of fashion, from the source of the fabric to the day you throw it away

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Spanish retailer Zara has launched a line of eco-friendly clothing called Join Life made of recycled and organic fabrics. (Zara)

At H&M’s flagship Canadian store in Toronto’s Eaton Centre, a rack of spiffy navy-blue jackets is rolled from the back room to the display floor.

“This one is made of wool with recycled fibres, and this one has recycled cotton,” H&M spokesperson Emily Scarlett says with a smile, showing off items from the chain’s eco-friendly line, dubbed the Conscious collection.

Scarlett points out proudly that H&M is also the world’s second-largest user of organic cotton.

The Swedish chain is eager to spruce up its environmental image. So is Zara, the massive fast fashion retailer from Spain, which just launched its first sustainable fashion line called Join Life, which uses organic and recycled materials.

Both retailers, which have dozens of locations in Canada, have come under attack in recent years — along with other fast fashion chains such as Forever 21, Joe Fresh and Topshop — for encouraging consumers to buy more clothing than ever, creating waste that eventually goes to landfill.

Fast fashion gets its name from its ability to take the latest style trends from the runway to the store floor in record time. But the industry can’t move fast enough when it comes to its impact on the environment.

Critics aren’t buying the stylish environmentalism.

Misinformation in the marketing

“I am very skeptical of both the Conscious Collection and the new initiative that Zara is launching,” said Nikolay Anguelov, author of The Dirty Side of the Garment Industry, a book about fast fashion’s negative impact on the environment.

“There’s misinformation in the marketing message. The eco label is not deserved. The eco is a minor improvement, but unfortunately, it’s communicated to the consumer as if it’s problem solved.”

A professor of public policy at the University of Massachusetts Dartmouth, Anguelov says his research shows that fabric accounts for only about 13 per cent of the cost of any piece of clothing, so a switch to natural textiles doesn’t make much of a difference. The fashion industry’s carbon footprint is huge, including energy used for transportation and toxic chemicals, such as bleach and dyes, used in manufacturing.

Then there’s the problem of massive waste. Anguelov says Millennials are consuming five times the number of apparel products as the generation before them and then discarding much of it.

That trend is driven by low prices, he says.

Mountains of textiles tossed in the trash

“We sometimes buy things we don’t need at places like Zara and H&M,” shopper Rafaella Silva admitted to CBC News, showing off the three sweaters she had just purchased at Zara for a total of $70.

“It’s mainly because of the price. If I had a choice to go somewhere that I could purchase something that would last longer and the price wasn’t that much, of course I would, for sure.”

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Shopper Rafaella Silva spent $70 for two sweaters and a top. The low prices make fast fashion seductive, she said. (CBC)

Municipalities in Nova Scotia, Ontario and British Columbia are looking at ways to limit the amount of textiles being dumped in local landfills. A study done by the Secondary Materials and Recycled Textiles Association (SMART) showed that North Americans throw away almost 37 kilograms of textiles every year.

“You want a jacket, you want a sweater, you want a hoodie,” says Colin White, a student at Saint Mary’s University in Halifax who had just bought a winter coat at Zara. “It’s just cheaper here.”

The fashion industry has responded, forming its own group to address the waste problem. Based in San Francisco, the Sustainable Apparel Coalition is a collaboration between two very odd bedfellows: super-retailer Walmart and Patagonia, the high-end maker of outdoor clothing that describes itself as an “activist company” when it comes to the environment.

It’s an industry-wide problem

Coalition CEO Jason Kibbey says the group’s 185 members include most fast fashion retailers, including H&M and Inditex, Zara’s parent company.

“This is not just a fast fashion problem,” he points out. “This is a problem across all segments. It’s a systemic challenge across all supply chains.”

 

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Pieces of clothing are seen in trash at a City of Toronto waste transfer station. (CBC)

Kibbey says a huge amount of industry investment is going into new, “closed loop” technology, where items of clothing can be broken down and recycled to make new items. It’s also known as a circular system, or a “cradle to cradle” approach.

“There’s a lot of investment and activity in that area right now,” he said. “It doesn’t mean there isn’t a long way to go. But given the amount of activity I see, this will be our future. It’s just a question of how long will it take us to get there.”

Trying to spur recycling innovation

H&M is in its second year of a “Global Change” innovation challenge in which five winners split a grant worth €1 million ($1.5 million Cdn). The award is meant to be a catalyst to accelerate the shift from “a linear to a circular fashion industry,” says the company. “The aim is to protect the planet and our living conditions.”

Even some anti-consumer advocates praise the chains that are taking action.

‘They are never going to advocate for the one solution that is going to have the biggest environmental impact, which is to simply reduce the amount we consume altogether.– Madeleine Somerville, author of All You Need Is Less

“I’m impressed,” said Madeleine Somerville, the Calgary-based author of All You Need Is Less, a book about how to adopt a more eco-friendly lifestyle.

“I think any time a retailer takes steps to develop manufacturing processes to actually address the waste and the pollution that comes from creating these clothes, that needs to be recognized and celebrated.”

But she notes that for all retailers, the overarching goal is to sell more clothing.

“They are never going to advocate for the one solution that is going to have the biggest environmental impact, which is to simply reduce the amount we consume altogether.”

Consumers are challenged to make a choice between the health of the planet and their desire to wear the very latest, most inexpensive, fashion trends.

Corrections

  • A previous version of this story said fabric accounts for six per cent of the cost of a piece of clothing. In fact, it accounts for about 13 per cent.
    Oct 04, 2016 1:21 PM ET

*This story first appeared on CBC