Inditex invested 1.6 billion euros (1.7 billion dollars) last year, from which 227 million where destined to research and development. On the other hand, H&M invested 1.2 billion euros (1.3 billion dollars).
More than three million euros (3.3 million dollars). This is the amount the three fashion giants invested last year in things like circularity, technology or store improvements. In a time where retail is in being questioned, fast fashion tries to change its business model to be more sustainable and technology is supporting a global transformation. Fashion giants transform to enter the new era, in what do they invest?
Through the last couple of years, Inditex has invested more than 9.4 billion euros (10.5 billion dollars) in research and development, and 2 billion euros (2.2 billion dollars) in technology.
In 2018, the group continued speeding its investments with a number that overcomes 1.6 billion euros (1.7 billion dollars), as it states in its yearly annual report. In investigation and development, the company invested 227 million euros (254 million dollars) and almost half was destinated to technology, development and improvement of the consumer’s experience.
Focus in the product was key for 91 million euros investment
91 million euros were invested in research and development activities focused in the product, such as development of new finishes, technical textiles or sustainability. Circulation and the proper use of resources were the third category, that took the bulk of expending with 75 million euros (84 million dollars). To textile development, the company destined 2.3 million dollars in 2017 in collaboration with MIT and Cáritas and other 1.6 million in 2018.
H&M doesn’t detail the core of its investment, but sublines technology and sustainability as two key areas. Last year, the investment of the Swedish giant went up to 12.8 billion Swedish kronas (1.4 billion dollars), a 1.15% more than last year.
In their annual report, the company explains that in January 2019, Germany completed the transaction towards their new global online platform. The company has started implementing a new logistics system that still needs to be applied in some countries.
H&M increased its investment in the fourth quarter of the year
H&M points that in 2018 had some connection problems with the implementation of the new logistics system in United States, France, Italy and Belgium and that “applying the lessons learned, we increased investments in the fourth quarter to secure upcoming transitions in 2019”. With the transformation now well on the way, capital expenditure will reduce in 2019.
On the other hand, the group explains that digital investment keeps rising in relation to the capex: “we will continue to invest so that we can accelerate the development of customer-facing technologies and be innovative with technology wherever the customers”.
The company has also invested in sustainability and circularity, even though part of the investment destined to this period is through H&M Foundation. The company has participation in groups such as Worn Again, Re:newcell and Moral Fiber, specialized in textile recycling and keeps an alliance through its foundation with the Hong Kong Research Institute of Textiles and Apparel (Hrita), to which has destinated 5.8 million euros.
Gap bets for omnichannel and improving its digital strategy
Fast Retailing invested 5.7 billion yens last year (529 million dollars). This figure consists primarily of 31.9 billion yens spent on acquiring property, factories, and equipment to grow UNIQLO International and global brands store networks, and 16.5 billion spent on intangible assets such as systems investment.
Gap doesn’t develop its expenses in innovation, besides that, it destined 705 million dollars in technology and equipment to reinforce their omnichannel and digital strategy, along with in-store improvements. The company also details 50 million dollars to research and development.