Grupo Cortefiel

Sustainability Report 2015

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Grupo Cortefiel

Sustainability Report 2015

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01
Grupo Cortefiel
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The Company

2015 Basic Data

1880

Established

2,095

Points of Sale

1,447

Direct Operated Stores

648

Franchises

1.095

Turnover Million of Euros

85

Million Garments

11.357

Employees

89

Countries (PHYSICAL STORES AND/OR ONLINE SELLS)

Data as of February 29th 2016.

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Points of sale evolution

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CEO Message

CEO Message

I am pleased to present the corporate report, which we have published for the 10th consecutive year. This report extends beyond the income statement and details our actions in the field of sustainability. I firmly believe that every company should have a positive social impact in addition to a commercial purpose.

Our position as a private company does not relieve us from a clear commitment to transparency by adhering to the highest standards of reporting and good governance.

I also want to take this opportunity to express my belief in the importance, not only of generating profits, but the way they are generated, in the current economic and business environment.

It is now more strategic, if possible, to create long-term value through responsible and sustainable growth, by responding to the demands of all internal and external stakeholders.

Throughout its 136-year history, Grupo Cortefiel has been a benchmark in the industry, and in recent years has established itself as a multi-format business characterised by efficiency and competitive positioning.

Fiscal year 2015 closed with consolidated turnover of EUR 1,095 Million, representing an increase of 8.32% from the previous year. The Group’s like-for-like sales also posted positive gains of 5.9%.

At the close of FY2015, the Company had 2,095 stores and a presence in 89 countries.

It is worth noting the 19.09% growth in sales at Women’secret, which again improved its leading position in the Spanish market with a market share increase of 6 percentage points and nearly 8%.  

Springfield, the Group’s main brand, also posted significant sales growth of 8.85%, thanks to the broad appeal of its women’s collections and a strong upswing in online sales.

The increased sales of these chains offsets the slight decrease of -0.97% at Cortefiel. We expect to reverse this trend with the new direction, the positioning and product plans that we have implemented, a gradual image makeover plan, and a commitment to a greater presence of Pedro del Hierro brand at the stores, the Group’s most exclusive brand.

Sales among Grupo Cortefiel’s online stores rose 93.5% on a consolidated basis, meeting the growth expectations established for this channel.

The strategic objectives for the next fiscal year will focus on increasing profitability on a like-for-like basis, strengthening the international market, and developing multi-channelling, while optimising and monitoring investments and expenses.

The key to our international and multi-format business is to combine retail experience with agility in managing the digital market. Omni-channelling, the technological leap, and new forms of communication are the Group’s largest commitments.

Our international growth in recent years would have been impossible without effective, innovative logistics which reduce times. What is more, it is always based on a sustainable model in which the environmental impact of our business is controlled.

Behind the fiscal year’s positive results are more than 11,000 employees, who are deeply involved in achieving results and committed to service excellence.

I am fortunate to have a motivated, committed, and highly valued team, which constitutes our greatest asset.

Our values -Commitment, Teamwork and Passion- encourage us to promote talent and to give the best of each of us.

Moreover, we want to create a stable, quality workplace. To that end, we were able to generate entry-level positions and youth employment throughout the recession years.

We believe undoubtfully that a commitment to training is a commitment to the future. Therefore, we advocate the professional development of new generations through our active collaboration with leading fashion institutes and top universities. These collaborations and our involvement on their boards and advisory councils have led to agreements for grants, direct recruitment, research, and consulting projects. We will continue to pursue this approach and promote technological and environmental research with new collaboration projects.

Our brands’ approach to the social reality of our customers and our employees has led to social projects like “Post Surgery Bras”, an underwear and swimwear line from Women’secret for women who have had breast cancer, and H2Ø, the line of jeans from Springfield that minimises water consumption in the manufacturing process. We produce our garments according to the highest social, ethical, and environmental standards.

Another indication of the success of the initiatives involving employees is the “Proyecto Involucrados,” which recently celebrated its 10th year in existence. It has been 10 successful years of supporting large-scale social projects.

We will continue to strive every day to maintain the Group’s current leadership position in the international fashion industry.

I am proud to lead a business Group with exciting prospects for the future. My goal is to ensure that this team is proud and motivated to work for the brands it represents and that this effort strengthens our competitive advantage.

Berta Escudero

CEO

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Board of Directors

Mr. Francisco Javier Campo (Tarna 21, S.L.U.)

Non-Executive Chairman - Independent

Mrs. Berta Escudero Pereira

CEO - Executive

Mr. Carlos Mallo Álvarez

Director - Propietary

Mr. Pedro López de Guzmán

Director - Propietary

Mr. Ricardo de Serdio Fernández

Director - Propietary

Mr. Michel Maurice Paris

Director - Propietary

Theatre Directorship Services Alpha, S.ar.l.

Represented by: Mr. Javier de Jaime Guijarro

Director - Propietary

Theatre Directorship Services Beta, S.ar.l.

Represented by: Mr. José Antonio Torre de Silva and López de Letona

Director - Propietary

Mr. Ramón Hermosilla Gimeno

Secretary - Non Director

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Management Committee

Berta Escudero

Chief Executive Officer Grupo Cortefiel

Marcos Gómez

Chief Financial Officer Grupo Cortefiel

Jaume Miquel

General Manager Cortefiel, Pedro del Hierro and Women’secret

Diego Charola

HR General Manager Grupo Cortefiel

Luis González

General Manager Springfield and Fifty Factory

Antonis Kyprianou

Franchise General Manager Grupo Cortefiel

Manuel Jiménez

General Manager Supply Chain Grupo Cortefiel

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Cortefiel, S.A. and Subsidiaries

Directors' Report for the year ended 29 February 2016

Economic backdrop and performance of the industry and businesses

In the year ended February 29, 2016 the Spanish economy, main market of the group, has continued with the change of trend started the previous year, with respect to the economic slowdown of prior years, which had a significant effect on consumption. The relaxation of the tensions in European markets, together with the recognition by international bodies of the efforts made internally, led to increased confidence among the players in the Spanish economy. Although signs of change have been quite positive during the first months of the year due mainly to political uncertainty in the second half it has become to produce some slowdown. This change in trend was reflection in private consumption mainly during the last months of the year.

Eurozone (the main market in which the Group operates through its own stores) GDP growth was 1.6% in 2016 compared with 0,9% in 2015. In Spain, GDP growth for 2015 amounted to 3.2%, compared with 1.4% in 2015.

In 2015 there was 2.9% growth in consumption in Spain, which was a result of a year-on-year decrease in the unemployment rate from 23.7% to 21.0%, and the improvement in the consumer confidence index. To a greater or lesser extent, these trends appeared in all sectors of the retail trade (food, personal equipment, household goods, etc.). Hence, the year-on-year personal equipment retail index was 2.3%.

Specifically, in Spain, the textile distribution sector continues at levels below those of 2006, though 2015 was the second year of growth since that year. In 2015 textile trade grew by 5.1% in total. The situation of political uncertainty as well as the adverse weather conditions affected significantly the last quarter of the year

In addition, the situation of certain economies in other countries in which the MEP Group operates has adversely affected the results of its business activities in these markets, either through the results of its own stores (particularly due to the exchange rate effect resulting from the depreciation of the Russian rouble) or through the results of its franchises (particularly the political situation in Venezuela).

The Group took advantage of this consumer environment with a 8.5% increase in income. Comparable sales rose by 6.49% in the Spanish market, the Group's main market, and 4.04% in the international market. The increase in sales at the Springfield and Women' Secret chains compensated the decrease in sales at the Cortefiel chain, that is currently in the process of repositioning of prices and offer. The market trend in recent years was consolidated with an industry-wide shift of sales to the sales seasons and an increase in promotional offers.

The evolution of the activity during the first three quarters of the year was very positive with increases of sales and Ebitda of 10.8% and 45% respectively and a slight decline in the percentage of margin. During the last quarter of the year, adverse weather conditions and the situation of political uncertainty affected the confidence of consumers and made that sales growth was only 3.2%, the percentage of gross margin dropped 3.2 percentage points and Ebitda come down EUR 10.7 million with respect to the same period of the previous year.

In the year ended 29 February 2016, improvements continued in relation to the efficiency of the commercial chains and in the operation of the stores in which business activities are carried on.

The accompanying consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, reflect the performance of the companies comprising the MEP S.àr.l. and Subsidiaries Consolidated Group for the period between 1 March 2015 and 29 February 2016.

The detail of the income included in the consolidated income statement for the year ended 29 February 2016 is as follows:

Thousands of Euros
In-store sales 977,364
Wholesale and franchise sales 107,647
Other sales 729
Revenue 1,085,740
Rendering of services 3,546
Rental income 247
Royalties 835
Other operating income 4,801
Other income 9,429

Based on the available information, the market share in Spain -the Group’s main market- increased at Springfield Woman (0.3%), Springfield Man (0.2%) and Women'Secret (0.6%), while it decreased slightly in the men's and women’s segments of Cortefiel.

The development of the Group in Russia, Mexico and Balkans continues its evolution with significant improvements both at the level of income and contribution to the consolidated Ebitda.

Also, the Group's sales through franchises increased by 8.4% with respect to the year ended 28 February 2015, with significant change in the American, African and Saudi Arabian markets. The EBITDA contributed by the franchise business was EUR 32.1 million.

Online sales have experienced a growth of 93.5% with consolidated Ebitda growth of 85.5%, while their contribution to the results is still small as they are in phase of development and expansion.

The Group's margin have decreased (58.61% in 2015/16 compared to 60.08% in 2014/15) in a scenario of high competitiveness in prices and adverse weather conditions.

The Group closed the year with 2,095 sales outlets, up 2% on the year ended 28 February 2015. This figure includes own stores, corners and franchised stores. In the year ended 29 February 2016, 61 own stores were opened, of which 19 are located outside Spain. The commercial surface area enlarged by 0.5%.

The Group's management efforts during the period continued to focus on the following strategic lines of action:

  • Creation of value for shareholders through EBITDA growth and a reduction of bank borrowings.
  • Future growth based on the expansion of franchises in emerging countries and corners in the rest of Europe.
  • Expansion in medium cities of the Group’s segments that exhibit most capillarity (Springfield and women’secret).
  • Strengthening of all the Group's brands via the Internet with support of a new online platform.
  • In the commercial area, priority was given to a greater turnover of goods, thereby promoting efforts to clear and rationalise each season's non-strategic stock, which has led to greater emphasis on seasonal collections and goods. The protection of margins and the improvement of critical ratios (conversion ratio, average sale per transaction ratio, etc.) for the stores’ operations continued to be a priority.

The business's financial management continued to centre on improvements in working capital management and on the strict control of the assignment of investments earmarked for openings and refurbishments, which led to an increase in cash-flow generation. Market conditions with a trend towards price reductions and an increase in the number of units sold made an increase in the Group's stock levels necessary, which was financed by suppliers.

Also, as explained in the accompanying notes to the consolidated financial statements, in the year ended 29 February 2016 negotiations took place with the banks involved in the Group's syndicated financing with a view to renegotiating certain terms and conditions thereof. Finally, in March 2016 an agreement with such entities was reached to modify debt maturity dates.

The EBITDA from continuing operations for the year ended 29 February 2016 stood at EUR 104 million, compared with EUR 97 million in the preceding year.

The recurring EBITDA in the year ended 29 February 2016 amounted to EUR 108.3 million, once EUR 4.3 million of non-recurring expenses (indemnity payments, penalties and other costs) had been deducted, compared with EUR 98.6 million for the year ended 28 February 2015. Accordingly, recurring EBITDA/Total income for the year ended 29 February 2016 was 9.89%, compared to 9.75% in the year ended 28 February 2015.

The cash flows from the Group's activities together with adequate control of the investments made did not enable the Group to reduce its net bank borrowings, which increased by EUR 16 million, mainly as a result of the new financing conditions described in the notes to the consolidated financial statements, with an increase in PIK interest and PIYC interest.

The loss before tax from continuing operations was EUR 5.7 million and attributable net loss amounted to EUR 5.4 million.

Outlook

According to analysts the overall situation of the Spanish economy will continue with the improvements in the levels of consumption, an increase in the levels of credit granted and improvement in the unemployment and hiring rates.

Despite this economic outlook the Group's directors will continue to work on business reorganisation measures and develop new businesses aimed at reactivating, as far as possible, the cash generation levels necessary to fulfill its obligations.

The main objectives for 2016/17 are to improve comparable sales in order to take greater advantage of existing store space, the review of the strategy of positioning of the chain Cortefiel, to reinforce the Group’s internationalisation process, to increase and reinforce the on-line business, to preserve and increase the market share of the Group’s various chains (particularly the women's sector) and to optimise and control investments and expenses.

Also, the aim of internationalisation is to seek new franchise-agreement opportunities and support the organic growth of franchisees.

The criteria of financial efficiency and commercial and operating effectiveness sought by the shareholders and by the management team -with particular importance currently being placed on the cost containment policy and protection of margins- will make it possible to successfully take advantage of the current economic upturn in the main markets in which the Group operates. In this respect, the only significant cost increases anticipated are those relating to the international expansion process and the reinforcement of the on-line business.

Average payment period to suppliers

The information required by the additional provision three of Law 15/2010 of 5 July (as amended through the final provision two of the Law 31/2014, of 3 December) is as follows:

Days
Average payment period to suppliers 42
Ratio of paid transactions 39
Ratio of unpaid transactions 62
Amount (Thousands of Euros)
Total payments 288,450
Total pending payments 42,598

Other information

In the year ended 29 February 2016 the Group did not perform any transactions involving treasury shares. At 29 February 2016 the Group has 31.701.000 shares of its parent company, 2.12% of the total number of shares issued.

The Group is conducting certain research and development projects with a view to improving the manufacturing and design processes for its products.

The information on the environment, personnel and derivatives is disclosed in the related notes to the accompanying consolidated financial statements for the year ended 29 February 2016.

Events after the reporting period

On 16 March 2016, the Group entered into an agreement to extend the maturity of the syndicated financing agreement to 20 March 2018 for the Tranches B and to 1 March 2018 for the revolving tranche.

In March 2016 the parent company acquired 774,530 shares amounting to EUR 132 thousand to an average 0.17 euros per share.

Also, the liquidation processes of the subsidiaries Quiral Czech S.R.O., incorporated in the Czech Republic, and Tulipan Confection, S.A., incorporated in the Hungary, were terminated on 3 March 2016 and 29 March 2016 respectively.

2014 2015 Var %
BALANCE SHEET


Non financial fixed assets 361.31 332.33 -8.02
Financial fixed assets 92.65 98.61 6.43
Stock 136.80 162.15 18.53
Customers 20.76 25.08 20.77
Commercial suppliers 243.64 268.33 10.13
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Total discontinued activity operating income 1,011.07 1,095.17 8.32
Gross margin / Revenues 60.5% 59% -2.54
Operating profit 25.64 35.28 37.60
Recurring EBITIDA 98.60 108.29 9.83
MANAGEMENT RATIOS


Stock / Sales 13.7% 14.9% 9.23
Customers / Sales 2.1% 2.3% 11.29
Suppliers / Sales 24.4% 24.7% 1.49

Data in millions of Euros as of February 29th 2016.

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Main Figures

Data in millions of Euros as of February 29th 2016.

(*) Sales to franchises only includes Grupo Cortefiel turnover from its franchises, and not customer sales.

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Income

Data in thousands of Euros as of February 29th 2016.

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Income Chains

Data as of February 29th 2016.

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Income Chains

Data in millions of Euros as of February 29th 2016.

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Distribution of Expenditure

Data as of February 29th 2016.

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Remuneration of Employees

Data in millions of Euros as of February 29th 2016.

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Investments

FULLY CONSOLIDATED COMPANIES

Group Company Location Percentage of Ownership (a) Business Activity Auditor
Eurofiel Confección, S.A.U. Madrid 100 Distribution and central buying entity Deloitte
Cortefiel Services, S.A. Madrid 100 Services Deloitte
Serman 92, S.L. Madrid 100 Retailing Deloitte
Fashion Auction, S.L.U. Madrid 100 Holding company Deloitte
Cortefiel France, S.A.S. Paris 100 Holding company Deloitte
Springfield France, S.A.S. Paris 100 Retailing Deloitte
Women´s Secret France, S.A.S. Paris 100 Retailing Deloitte
SPF Germany GmbH Düsseldorf 100 Retailing Unaudited
Bizarro e Milho, S.A. Lisbom 100 Retailing Deloitte
Confemo – Confeccoes e Moda de Espanha, S.A. Lisbom 100 Holding company and Retailing Deloitte
Confespanha, S.A. Lisbom 100 Retailing Deloitte
Cortefiel Netherlands, NV. Rotterdam 100 Retailing Unaudited
Quiral Belgique, S.A. Brussels 100 Retailing Deloitte
Quiral Luxembourg, S.A. Luxembourg 99,99 Retailing Unaudited
Quiral Czech S.R.O. (b) Prague 100 Dormant Unaudited
Cortefiel Commercial, S.A. Fribourg 100 Logistics centre and sales to franchises Deloitte
Springfield Hungary Trading Kft. Székesfehérvár 100 Retailing Deloitte
Tulipan Confection, S.A. Székesfehérvár 100 Dormant Unaudited
Women’s Secret Magyarország, Lt. Székesfehérvár 100 Retailing Deloitte
Springfield Handelsgesellschaft MbH. Vienna 100 Retailing Unaudited
SPF Polska Sp. Z o. o. Warsaw 100 Retailing Deloitte
Cortefiel Polska Sp. Z o. o. Warsaw 100 Holding company Unaudited
Cortix D.o.o. Beograd Belgrado 100 Retailing Deloitte
Cortix D.o.o. Sarajevo Sarajevo 100 Retailing Deloitte
Cortix BL D.o.o. Sarajevo 100 Retailing Unaudited
CRTF Moda D.o.o. Zagreb 100 Retailing Unaudited
Cortix México SAPI de CV (b) Guadalajara 100 Holding company Deloitte
Eurofiel México SA de CV (b) Guadalajara 100 Distribution and central buying entity Deloitte
Modafiel de México SA de CV (b) Guadalajara 94,57 Retailing Deloitte
LLC Fashion Retail Group (b) Moscow 100 Retailing Deloitte
Cortix Bulgaria EOOD Sofia 100 Retailing Unaudited
Cortix D.o.o Podgorica Podgorica 100 Retailing Unaudited

SOCIEDADES CONSOLIDADAS POR EL MÉTODO DE PUESTA EN EQUIVALENCIA

Sociedades del Grupo Domicilio Social % de Participación (a) Actividad Auditor
Adriatik Grup Ltd. Skopje (b) Skopie 50 Retailing Unaudited
Scarfil Retail Management Company Limited Hong-Kong 25 Retailing Unaudited
Anekis S.A. Madrid 24,75 Marketing Deloitte
Multifiel Madrid 50 No activity Unaudited
Urecor, Comunicación y Medios, S.A. Madrid 25 No activity Unaudited

(a) Effective direct or indirect ownership through consolidated companies.
(b) These companies' reporting period ends on 31 December.

Events after the reporting period:

On 16 March 2016, the Group entered into an agreement to extend the maturity of the syndicated financing agreement to 20 March 2018 for the Tranches B and to 1 March 2018 for the revolving tranche.

In March 2016 the parent company acquired 774,530 shares amounting to EUR 132 thousand to an average 0.17 euros per share.

Also, the liquidation processes of the subsidiaries Quiral Czech S.R.O., incorporated in the Czech Republic, and Tulipan Confection, S.A., incorporated in the Hungary, were terminated on 3 March 2016 and 29 March 2016 respectively.

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Consolidated Companies

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Key Facts
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2,095 points of sale in 89 Countries

242
America
1,525
Europe
206
Africa and Middle East
122
Asia
29
Online Markets
Cortefiel Pedro del Hierro Springfield Women'secret Fifty Factory Total
Spain 287 11 335 269 36 938
Albania 1 - 1 - - 2
Andorra 2 - 4 2 - 8
Armenia - - - 1 - 1
Austria - - 3 - - 3
Belarus - - 2 5 - 7
Belgium 6 - 22 14 - 42
Bosnia 2 - 6 4 - 12
Bulgaria 2 - 2 1 - 5
Croatia - - 6 5 - 11
Cyprus 7 - 18 - - 25
Czech Republic - - 2 1 - 3
Estonia 2 1 3 5 - 11
France - - 52 2 - 54
Georgia 1 - - - - 1
Germany - - 11 - - 11
Gibraltar - - - 1 - 1
Greece - - - 2 - 2
Hungary - - 12 9 - 21
Ireland - - 6

6
Italy - - 32 - - 32
Latvia 2 - 1 2 - 5
Lithuania 1 1 1 1 - 4
Luxembourg - - 5 1 - 6
Macedonia - - 5 1 - 6
Malta 1 - 3 1 - 5
Montenegro 2 - 1 2 - 5
Poland - - 9 - - 9
Portugal 46 - 60 46 5 157
Romania - - 1 2 - 3
Russia - - 30 44 - 74
Serbia 2 - 14 14 - 30
Slovakia - - 2 1 - 3
Slovenia - - - 2 - 2
Ukraine - 1 7 12 - 20
Total Direct Operated Stores + Franchise 364 14 656 450 41 1,525
Cortefiel Pedro del Hierro Springfield Women'secret Total
Bermudas - - - 1 1
Bolivia 1 1 2 2 6
Chile 3 - - 12 15
Colombia - - - 8 8
Costa Rica 1 - 3 2 6
Curaçao 1 - 1 1 3
Dominican Republic 1 - 2 2 5
Ecuador 10 - 12 6 28
Guatemala - - 1 1 2
Mexico 41 - 41 44 126
Panama - - - 1 1
Paraguay - - 2 1 3
Peru 6 - 13 - 19
San Marteen 1 - - 1 2
Uruguay - - 2 - 2
Venezuela 3 - 5 7 15
Total Direct Operated Stores + Franchise 68 1 84 89 242
Cortefiel Springfield Women'secret Total
Angola 3 4 4 11
Algeria - - 2 2
Bahrain - - 1 1
Egypt 4 8 6 18
Ghana - 3 1 4
Iran 1 8 5 14
Iraq - 1 - 1
Israel - 16 - 16
Jordan 2 3 2 7
Kuwait 3 2 7 12
Lebanon 2 9 4 15
Libya - 1 - 1
Oman - - 1 1
Qatar 1 3 3 7
Saudi Arabia 7 9 36 52
Syria 1 - 2 3
Tanzania 2 2 2 6
United Arab Emirates 3 21 11 35
Total Direct Operated Stores + Franchise 29 90 87 206
Cortefiel Pedro del Hierro Springfield Women'secret Total
Azerbaijan - - - 2 2
China - 2 40 - 42
Indonesia - - - 1 1
Kazakhstan 2 - 5 - 7
Kyrgyzstan -
1 1 2
Malasya - - 8 - 8
Myanmar - - 2 2 4
Pakistan 1 1 - - 2
South Korea - - - 10 10
Thailand - - 2 2 4
The Philippines 2 8 17 11 38
Vietnam - - 2 - 2
Total Direct Operated Stores + Franchise 5 11 77 29 122
Cortefiel Pedro del Hierro Springfield Women'secret Fifty Factory
Spain
Austria
Belgium
Bulgaria
China



Cyprus



Czech Republic



Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Latvia



Lituania



Luxembourg
Malta



Norway



Poland
Portugal
Romania



Russia


Slovakia



Sweden
Switzerland



The Netherlands
United Kingdom

02 Group's Brands

Different styles with their own personality.

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02
Group's Brands
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Cortefiel

2015 Basic Data

1945

Established

466

Points of Sale

39

Countries

321.911

Turnover Million of Euros

29%

% of the Group´s Total Turnover

2.480

Employees

Data as of February 29th 2016.

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Cortefiel - Points of Sale Development

Data as of February 29th 2016.

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Cortefiel - Points of sale by country

Data as of February 29th 2016.

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Cortefiel - Openings 2015 by country

Data as of February 29th 2016.

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Cortefiel - Points of sale by country

Data as of February 29th 2016.

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Cortefiel - Openings 2015 by country

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Pedro del Hierro

2015 Basic Data

1992

Acquisition of the Brand by the Group

492

Points of Sale

26

Stand Alone (PdH Woman)

466

Cortefiel Store (PdH Man&Woman Spaces)

41

Countries

65

Employees (Stand Alone)

Data as of February 29th 2016.

Data belong to independent PdH Woman Stores.

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Pedro del Hierro - Points of sale by country

Data as of February 29th 2016.

Data belong to independent PdH Woman Stores.

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Pedro del Hierro -Openings 2015 by country

Data as of February 29th 2016.

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Pedro del Hierro - Points of sale by country

Data as of February 29th 2016.

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Pedro del Hierro -Openings 2015 by country

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Springfield

2015 Basic Data

1988

Established

907

Points of Sale

63

Countries

466.501

Turnover Million of Euros

43%

% of the Group´s Total Turnover

3.099

Employees

Data as of February 29th 2016.

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Springfield - Points of Sale Development

Data as of February 29th 2016.

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Springfield - Points of sale by country

Data as of February 29th 2016.

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Springfield - Openings 2015 by country

Data as of February 29th 2016.

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Springfield - Points of sale by country

Data as of February 29th 2016.

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Springfield - Openings 2015 by country

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Women'Secret

2015 Basic Data

1993

Established

655

Points of Sale

63

Countries

247.726

Turnover Million of Euros

23%

% of the Group´s Total Turnover

1.296

Employees

Data as of February 29th 2016.

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Women'secret - Points of Sale Development

Data as of February 29th 2016.

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Women'secret - Points of sale by country

Data as of February 29th 2016.

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Women'secret - Openings 2015 by country

Data as of February 29th 2016.

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Women'secret - Points of sale by country

Data as of February 29th 2016.

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Women'secret - Openings 2015 by country

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fifty factory

2015 Basic Data

1997

Established

41

Points of Sale

5

Openings

2

Countries, Spain and Portugal

416

Employees

Data as of February 29th 2016.

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Fifty Factory - Points of sale evolution

Data as of February 29th 2016.

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Fifty Factory - Points of sale by country

Data as of February 29th 2016.

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Fifty Factory - Openings 2015 by country

Data as of February 29th 2016.

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Fifty Factory - Points of sale by country

Data as of February 29th 2016.

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Fifty Factory - Openings 2015 by country

03 Customers Commitment

Quality, service and safety of our products to satisfy our customer's needs.

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03
Customers Commitment
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Stores
Cortefiel
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Cortefiel

Springfield
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Springfield

Women'Secret
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Women'Secret

Pedro del Hierro
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Pedro del Hierro

fifty factory
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fifty factory

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Customer Information
WEBSITES 2014 VISITS 2015 VISITS GROWTH
www.grupocortefiel.com 436,473 519,211 19%
www.cortefiel.com 8,425,644 12,209,235 45%
www.pedrodelhierro.com 3,842,537 6,417,682 67%
www.spf.com 12,960,281 17,894,578 38%
www.womensecret.com 10,045,404 15,416,548 53%
www.fiftyfactory.com 921,956 2,561,739 178%

Data as of February 29th 2016.

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Visits to Web Sites

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Customer Service
613,000 Operations

Data as of February 29th 2016.

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Customer Service

Best customer experience in Fashion award. VII Platinum Contact Center Awards.
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Best customer experience in Fashion award. VII Platinum Contact Center Awards.

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Information Security
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Product Safety

2015 Basic Data

13.878

Analyzed patterns

99,6%

Positive Chemical Tests

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Cortefiel Club
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Cortefiel Club

Springfield Club
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Springfield Club

Women'secret Club
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Women'secret Club

04 Employees Commitment

Diversity, equality and growth opportunities for all employees.

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04
Employees Commitment
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Work Team

Global Staff data as of February 29th 2016.

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Number of Employees Evolution

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Distribution of Employees by Country

Spain Global Staff data as of February 29th 2016.

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Distribution by Chain

Data for Equivalent Workforce as of Frebuary 29th 2016.

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Distribution by Activity

Global Staff data as of February 29th 2016.

(*) Middle Management: Incorporates those with direct responsibility for teams and/or the business.

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Distribution by Professional Category

Global Staff data as of February 29th 2016.

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Distribution by Type of Contract


Permanent % Temporary %
Spain 4,735 57% 3,569 43%
Germany 16 76% 5 24%
Austria 28 100% - -
Belgium 227 100% - -
Bosnia 30 46% 35 54%
Bulgaria 27 93% 2 7%
Croatia 4 5% 71 95%
France 146 95% 7 5%
The Netherlands 60 100% - -
Hungary 130 100% - -
Luxemburg 30 100% - -
Mexico 267 99% 2 1%
Montenegro 5 24% 16 76%
Poland 49 60% 33 40%
Portugal 456 41% 669 59%
Russia 471 100% - -
Serbia 124 62% 75 38%
Others (*) 67 99% 1 1%
Total 6,872 61% 4,485 39%

Global Staff data as of February 29th 2016.

(*) Others: Covers the structure of Cortefiel Comercial S.A. (Switzerland, India and Hong Kong).

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Distribution by Country and Type of Contract

Data as of February 29th 2016.

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Remuneration of Employees

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Global Staff data as of February 29th 2016.

(*) Others: Covers the structure of Cortefiel Comercial S.A. (Switzerland, India and Hong Kong).

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Distribution by Country and Gender

Data for Equivalent Workforce as of Frebuary 29th 2016.

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Distribution by Activity and Gender

Global Staff data as of February 29th 2016.

(*) Middle Management: Incorporates those with direct responsibility for teams and/or the business.

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Distribution by Professional Category Activity and Gender


Under 25 years of age 25 - 35 years of age 35 - 50 years of age Over 50 years of age TOTAL
MEN
Directors and Senior Management 1 14 53 25 93
Middle Management (*) 6 129 178 80 393
Factory and Warehouse Staff - 2 12 4 18
Sales, Administrative Staff and Other 398 633 148 71 1,250
Total 405 778 391 180 1.754
WOMEN
Directors and Senior Management - 45 77 10 132
Middle Management (*) 23 533 439 43 1,038
Factory and Warehouse Staff - 8 12 5 25
Sales, Administrative Staff and Other 1,552 2,913 740 150 5,355
Total 1,575 3,499 1,268 208 6,550

Spain Global Staff data as of February 29th 2016.

(*) Middle Management: Incorporates those with direct responsibility for teams and/or the business.

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Distribution by Professional Category, Gender and Age

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Training

Global Staff data as of February 29th 2016.

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Basic Data

Data as of February 29th 2016.

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Number of Training Hours

EMPLOYEES APPLICANTSE-LEARNINGCLASSROOMTOTAL
Central Services236694930
Sales Network4,5685,2879,855
Total4,8045,98110,785

Global Staff data as of February 29th 2016.

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Employees who have received training

TRAINING MODALITYHOURS
E-learning22,148
Classroom45,121
Total67,269

Global Staff data as of February 29th 2016.

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Hours of training taught by modality

TYPE OF PROGRAMAPPLICANTS
On boarding443
Seasonal K-Items1,375
Operating Model69
Code of Conduct231
Total2,118

Global Staff data as of February 29th 2016.

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E-learning programs

TYPE OF PROGRAMAPPLICANTSHOURS
Commercial management and Points of Sales direction1264,032
Management - Managers1,86513,363
Managament - Second manager1022,448
Vendors training2,55120,408
Total4,64440,251

Global Staff data as of February 29th 2016.

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Stores programs

TYPE OF PROGRAMAPPLICANTSHOURS
Leadership and Innovation134449
English Classroom1144,332
Digital Excel822,460
Digital Illustrator562,240
Google Project451900
Total83710,381

Global Staff data as of February 29th 2016.

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central services programs

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Labour Relations
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Work / Life Balance
TYPE OF WORKDAYMEN%WOMEN%TOTAL%
Employees with full-time workday98812%3,02636%4,01448%
Employees with part-time workday7669%3,52442%4,29052%
Total1,75421%6,55079%8,304100%

Spain Global Staff data as of February 29th 2016.

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Distribution of Employees by workday

MENWOMENTOTAL
MATERNITY LEAVE / PATERNITY
Employees with maternity leave-309309
Employees with part-time maternity leave---
Employees with paternity leave30-30
Employees with transfer of the maternity leave to the father---
Employees at risk during pregnancy-299299
REDUCTION IN WORKING HOURS / LEAVES
Employees with reduction in working hours for legal guardianship reason - children7640647
Employees with reduction in working hours for legal guardianship reason - relatives-44
Employees with reduction in working hours for personal reasons-3737
Employees with temporary maternity leave11516
Employees leave for family care---
Employees with unpaid leave236588

Spain Global Staff data as of February 29th 2016.

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Permissions and leave of absence

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2013 2014 2015
OCCUPATIONAL ACCIDENTS
Minor 127 113 122
Serious 0 0 0
Very serious 0 0 0
Fatal 0 0 0
ACCIDENTS TO AND FROM WORK
Minor 75 58 62
Serious 0 0 0
Very serious 0 0 0
Fatal 0 0 0
Total Accidentes 202 171 184

Spain Global Staff data as of February 29th 2016.

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Occupational accident

Spain Global Staff data as of February 29th 2016.

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Health and Safety Training

Spain Global Staff data as of February 29th 2016.

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Healthcare

05 Suppliers Commitment

Transparency and responsability with suppliers of products and services.

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05
Suppliers Commitment
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Suppliers

Data as of February 29th 2016.

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Number of active suppliers (garments, products and services)

Data as of February 29th 2016.

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Distribution of supplier payments (garments, products and services)

Data as of February 29th 2016.

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Distribution of supplier payments by continent (garments, products and services)

Data as of February 29th 2016.

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Number of Active Suppliers by Garments

Data as of February 29th 2016.

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Distribution of Garments Sales by Continent

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Logistic Management

2015 Basic Data

5

Logistical headquarters (Aranjuez, Toledo, Canarias, Mexico and Hong Kong)

123.000 m²

Storage area

94

Million Garments Issued

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External Code of Conduct
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Supervision of the Production Chain

Data as of February 29th 2016.

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Number of evaluated factories

Data as of February 29th 2016.

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Factories distribution Evaluated by Country

06 Environment Commitment

Eco-efficient behavior at the point of sale, with products and transportation thereof.

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06
Environment Commitment
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Energy

Data as of February 29th 2016.

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Total Electricity Consumption


Electricity Consumption in Stores (kWh) kWh / Number of stores kWh / m2
Spain 80,565,607 85,891 283
Austria 132,343 44,114 149
Belgium 2,070,798 49,305 226
France 1,138,106 71,132 286
Hungary 1,049,598 49,981 212
Luxembourg 365,430 60,905 225
Mexico 2,983,633 57,378 279
Poland 691,171 76,797 317
Portugal 12,061,215 76,823 274
Russia 769,214 11,655 96
Serbia 273,000 10,111 60
Total 102,100,115 76,365 272

Data as of February 29th 2016.

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Electricity consumption in stores by country

Data as of February 29th 2016.

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Electricity Consumption in Spain

Data as of February 29th 2016.

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Electricity Consumption in Stores - Spain

Data as of February 29th 2016.

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Ratio Electricity Consumption in Stores - Spain

Data as of February 29th 2016.

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Electricity Consumption in Logistics Centres - Spain

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EMISSIONS

Grupo Cortefiel has accepted the challenge of managing its operations in a way that is most effective and respectful towards the environment, identifying the highest risks and the best opportunities.

This commitment is realised in the Group’s direct operations, as well as in those which it can influence, always seeking maximum efficiency and best results.

To this end, a Carbon Footprint measurement and management process has been initiated with the objective to take steps to reduce the impact of greenhouse gas and launch the necessary measures.


Total GHG Emissions 2015: 70.110 Tn CO2eq.

Calculation period: 1st March 2015 to 29th February 2016.

Calcuation scope: Headquarters, Logistics Centre and Warehouses, and all directly operated stores.

GHG emissions calculated according to the “Greenhouse Gas Protocol (GHG Protocol). Corporate Accounting and Reporting Standard”, established by the WRI (World Resources Institute) and WBCSD (World Business Council for Sustainable Development).


Scope 1 - Direct Emissions:

  • Fuels: Emissions from heating fuel in stores and facilities.
  • Refrigerants: Leaked emissions from air conditioning in stores OF Spain, Portugal and Belgium.
  • Vehicles: Emissions from vehicle fuel consumption (as they do not have their own fleet, refers to hired vehicles only).

Scope 2 - Indirect Emissions (Electricity):

  • Electricity: Emissions derived from electricity consumption in Headquarters, Aranjuez Logistics Centre (Madrid) and warehouses, and all directly operated stores.

Scope 3 - Indirect Emissions (Other activities):

  • Import: Emissions due to transport of goods from suppliers to the Hong Kong and Aranjuez (Madrid) logistics centres
  • Logistic: Transport of goods from Logistics Centres to all directly operated stores, transport of goods from online sales (LOGISTIC)
  • Export: Transport of goods to franchise stores
  • Ecommerce: Transport of goods from online sales;
  • Trips: Employee business trips
70.110 Tn CO2 eq

Data as of February 29th 2016.

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Total Greenhouse Gas Emissions

Data as of February 29th 2016.

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Distribution of Greenhouse Gas Emissions


Tn CO2 eq Kg CO2 eq / garment
Ratio of transport emissions of garments (*) 22.421 0,26

Tn CO2 eq Kg CO2 eq / m2
Ratio of emissions due to electricity consumption in stores (**) 37.679 99

Data as of February 29th 2016.

(*) Includes emissions due to transport of final product from suppliers to logistics centers and from logistics centers to directly operated stores, franchises and online sales.
(**) Includes indirect emissions due to electricity consumption in directly operated stores.

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Emission Rates

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Stores
Cortefiel
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Cortefiel

Springfield
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Springfield

WomanSecret
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WomanSecret

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Transports
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Packaging
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Products
13,878 ANALYZED PATTERNS
61 incidents

Chemical incidents are accepted only if: (1) is changed or reprocessed material failed; (2) the test is repeated and the result is consistent and (3) Second repeat test (random sample).

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Chemical Incidents

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Jeans H2O

07 Society Commitment

Involvement Group and employees in various charity projects.

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07
Society Commitment
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Total contribution 2005 - 2015: 1,055,853 Euros

Data as of February 29th 2016.

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Get Involved Project 2005 - 2015 evolution

1,055,853 Euros

Data as of February 29th 2016.

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Distribution by area of actitivy 2005 - 2015

1,055,853 Euros

Data as of February 29th 2016.

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Distribution by geographic area 2005 - 2015

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CHAIN CAMPAIGN RECIPIENT PROJECT CONTRIBUTION (€)
Cortefiel Get Involved Contest ASION Comprehensive care for children with terminal cancer and support for grieving families 36,660
Pedro del Hierro Get Involved Contest Spanish Red Cross Convivencial resources for women with unshared family responsibilities 27,533
Springfield Get Involved Contest Foundation Recover Sida vs Life 31,237
Women'secret Get Involved Contest Foundation Blas Méndez Ponce Improving the quality of life for children with cancer or seriously ill through leisure activities 28,985
Grupo Cortefiel 2015 Solidarity Telva Awards Foundation Sobre Ruedas Improving the quality of life for children with severe cerebral palsy. 9,000
Total 133,414

Data as of February 29th 2016.

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Contributions to Solidarity Projects 2015

CHAIN CONCEPT RECIPIENT CONTRIBUTION (€)
Grupo Cortefiel Membership Fee Foundation SERES 6,000
Grupo Cortefiel Membership Fee ASEPAM 2,000
Grupo Cortefiel "Friend of the Foundation" Fee Foundation Lealtad 4,000
Total 12,000

Data as of February 29th 2016.

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Other Contributions of Social Action 2015

NUMBER OF GARMENTS VALUE (€)
21,330 142,200 €

Data as of February 29th 2016.

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Clothing Donation 2015

Total contribution 2008-2015: 1,679,192 Euros

Data as of February 29th 2016.

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Summary of Charity Projects 2008 - 2015

1,679,192 Euros

Data as of February 29th 2016.

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Distribution by area of activity 2008 - 2015

1,679,192 Euros

Data as of February 29th 2016.

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Distribution by geographic area 2008 - 2015

CHAIN CAMPAIGN RECIPIENT PROJECT CONTRIBUTION (€)
Cortefiel Get Involved Contest ASION Comprehensive care for children with terminal cancer and support for grieving families 36,660
Pedro del Hierro Get Involved Contest Spanish Red Cross Convivencial resources for women with unshared family responsibilities 27,533
Springfield Get Involved Contest Foundation Recover Sida vs Life 31,237
Women'secret Get Involved Contest Foundation Blas Méndez Ponce Improving the quality of life for children with cancer or seriously ill through leisure activities 28,985
Grupo Cortefiel 2015 Solidarity Telva Awards Foundation Sobre Ruedas Improving the quality of life for children with severe cerebral palsy. 9,000
Total 133,414
CHAIN CONCEPT RECIPIENT CONTRIBUTION (€)
Grupo Cortefiel Membership Fee Foundation SERES 6,000
Grupo Cortefiel Membership Fee ASEPAM 2,000
Grupo Cortefiel "Friend of the Foundation" Fee Foundation Lealtad 4,000
Total 12,000
NUMBER OF GARMENTS VALUE (€)
21,330 142,200 €
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Charity Projects 2015

133.414

Euros Invested

2

Solidarity Campaigns

5

Beneficiary Institutions

5

Funded Projects

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ASION association
Contribution
36,660 €
ASION
Comprehensive care for children with terminal cancer and support for grieving families

Cortefiel has cooperated with ASION foundation for children and adolescents in palliative phase and their families so they can bring the best possible quality of life during their illness process. This project has been made available to patients and their families, technical assistance, family choice respite service, palliative physiotherapy and socioeconomic and psychological support during the mourning process for all family members.

Since 1989, ASION brings together families, friends and all those sensitized by the problem of paediatric cancer. This association accompanies the children or adolescents from diagnosis until the end of the road.

ASION association

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Spanish Red Cross
Contribution
27,533 €
SPANISH RED CROSS
Convivencial resources for women with unshared family responsibilities

Pedro del Hierro has committed to this project launched by the Spanish Red Cross in such a way that these women can receive personalised attention starting off with an analysis of their capabilities and weaknesses and promoting their integration in the society, thus avoiding situations of social vulnerability, alienation or abandonment.

The Spanish Red Cross in the Community of Madrid has taken part in the "2015 Get involved challenge" raising money for women in charge of children between 0 and 12 years old, pregnant or in severe social difficulties. That way, they can receive bio-psycho-social support.

Spanish Red Cross

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Foundation RECOVER
Contribution
31,237 €
FOUNDATION RECOVER
Sida vs Life

This year, Springfield, has given its full support to this foundation in his project “LIFE vs AIDS “. Through this collaboration, it has launched a unit specializing in prevention, diagnosis and treatment of HIV - AIDS in the Saint Dominique Hospital in Djunang, Cameroon.

The RECOVER Foundation is a private, secular and non-profit NGO specialized in international development cooperation in the health sector in Africa.

Foundation RECOVER

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Foundation Blas Méndez Ponce
Contribution
28,985 €
FOUNDATION BLAS MÉNDEZ PONCE
Improving the quality of life for children with cancer or seriously ill through leisure activities

Women'Secret has collaborated with this project, allowing that more children and teenagers can benefit from activities outside the hospital environment thus contributing to their quality of life and their immune system.

Since 1997, the Blas Méndez Ponce foundation has been improving the quality of life for children and teenagers with cancer and/or other difficult to cure diseases through leisure and free time.

Foundation Blas Méndez Ponce

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TELVA Solidarity Awards 2015
Contribution
9,000 €
2015 TELVA SOLIDARITY AWARDS
FOUNDATION SOBRE RUEDAS

Grupo Cortefiel has awarded “Sobre Ruedas Foundation” with the first National Solidarity Telva prize. This foundation provides severe cerebral palsy grants to improve their quality of life. With this award, over 250 families with children with cerebral palsy have benefited from various services and 10 adapted wheelchairs have been financed.

TELVA Solidarity Awards 2015

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Special Post-Surgery Bras

08 Responsible Commitment

The CSR model is proactive, consistent and tailored to its needs as well as those of its stakeholders.

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08
Responsible Commitment
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Materiality Analysis

In accordance with the Materiality Principle set out within the G4 framework of the Global Reporting Initiative (GRI), the information presented in this Sustainability Report 2015 is intended to cover the most significant aspects of Grupo Cortefiel’s activities, with a view to providing a faithful account of its actions in terms of finances, social activities, environmental matters, and corporate governance.

The methodology followed to identify relevant issues, for the company and for its stakeholders, is based on quantitative and qualitative analysis, taking an internal and external perspective.

This Materiality Analysis has allowed us not only to focus the content of this report so that it gives a transparent and satisfactory response to the expectations of the different internal and external audiences of Grupo Cortefiel, but also to obtain detailed information that can help us in the future to improve the internal management of issues identified as relevant.

The results obtained by combining the perspectives of those “whose opinion matters” allow us to see “what is truly important”.

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Opportunities, Risks and Performance

In a sector as complex as textiles, Grupo Cortefiel has tried to maximise the positive impact of its activities from day one, by developing and maintaining a responsible approach to supply chain management, a close relationship with customers, and a pleasant work environment, as well as minimising its environmental footprint and engaging actively with, and on behalf of, society.

Grupo Cortefiel’s CSR model is proactive, consistent and tailored to its needs as well as those of its stakeholders.

Management Approach

Our approach to Social Responsibility consists of integrating responsible behaviour into the management and income statement of the business.

The fashion industry is full of challenges and opportunities to align management objectives with individual development, respect for the environment and the company’s growth objectives.

Economic:

From a financial standpoint, we aim to build a strong position and to foster the confidence of our shareholders, customers, suppliers as well as the financial community in order to generate growth opportunities.

Environmental:

We care about the environment and therefore consider all environmental risks and opportunities arising at each stage of the product life cycle. We have worked on the design and implementation of projects in policy areas such as energy saving measures, minimisation of transportation resources as well as reduction of unnecessary materials and consumption.

Labour:

The Internal Code of Conduct, Performance Standards and the various collective agreements in place represent the basic principles of our Company / employee relations. Human capital is one of the company’s main assets, so we work on initiatives that promote professional and personal development.

Human Rights:

The textile sector is a key player in international Human and Labour Rights strategies. Our company has a major responsibility in this area. Our External Code of Conduct provides the foundation for our relationships with the people we work with. This enables us to apply its principles throughout the supply chain.

Social:

The Code of Conduct is the framework that articulates our commitment to corporate values and business integrity. It also lays the foundation for ethical behaviour and inspires correct and responsible decision-making.

Our commitment to social action has also developed in a highly positive direction. Our employees and customers are becoming increasingly involved in the social projects in which we collaborate. We can reach a wide section of the community through our points of sale and customers and this exposure acts as a driving force for change within society.

Product:

All customer communications are based on transparency and ethical principles. Information regarding garments is adapted to the demands of international standards and the various countries in which they are sold.

In order to guarantee the safety of our customers, all our garments are subject to the strictest quality controls as well as tests to verify that no substances that are harmful to health or the environment are present.

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Code of Conduct

Codes of Conduct

Grupo Cortefiel’s Codes of Conduct outline the company’s values and incorporate the company’s ethical principles in terms of performance. This provides a universal behavioural model based on transparency, evaluation and supervision.

Internal Code of Conduct

Today, Grupo Cortefiel is one of the leading multinational companies in the sector and, due to its size and diversity, requires solid organisational support to help avoid legal and reputational risks, in order to guarantee the sustainability of its management model.

Our Code of Conduct is a reference touchstone which provides clear direction to employees and ensures their day to day activities meet the Group's ethical standards.

The Code of Conduct plays a key role within our internal governance process, ensuring that the necessary mechanisms are in place to support employees’ compliance with their obligations and the development of commercial activities in Grupo Cortefiel’s name.

The Internal Code of Conduct includes the ethical values, commitments and good practices to which all staff must adhere. It incorporates basic guidelines of how to respond to conflicts of interest, corruption, internal fraud, data protection, customer and supplier relations, among other areas.

These commitments are undertaken by all employees of the Group, becoming extensive across an ambitious program of education that is also included in the sales network.

External Code of Conduct

Responsibility for guaranteeing ethical and responsible behaviour in all activities extends to all outsourced activities and to all products, regardless of where they are manufactured.

Each supplier, regardless of the service provided or its geographical location, assumes the obligation to comply with the External Code of Conduct, aimed at protecting Human Rights and labour conditions in factories. This Code of Conduct includes 12 basic principles, based on the United Nations and International Labour Organisation agreements.

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Ethics Committee

The Committee of Ethics is the body to which all parts with legitimate interest can go to communicate any possible nonperformance of the Code of Conduct, if it affects them personally as well as if it affects a third.

The Committee of Ethics is appointed by the Commission of Audit and Risks with representants of the departments of Human Resources, Internal Audit and Juridical Consultancy.

It is the body responsible for supervision and resolution of disputes in accordance with the company's behavioural guidelines as well as for identifying the best practices and their implementation.

Whistle-Blowing Hotline

The Whistle-blowing Hotline facilitates the reporting of conduct deemed irregular, unethical or counter to principles established in our Code of Conduct, when normal communication channels are ineffective or complicated.

Management of the Whistle-blowing Hotline ensures confidentiality for any employee who uses it, with an ironclad guarantee of transparency and safety.

09 Additional Information

Scope, coverage and verification of the Sustainability Report 2015.

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09
Additional Information
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Scope

Grupo Cortefiel has published its sustainability commitments in a structured way since the 2006/07 fiscal year. Again, audiovisual and electronic tools have been used to reach a wider public, making content easier to understand while guaranteeing rigorous and transparent information.

The contents included in this report have been developed following the guidelines and principles established in the Global Reporting Initiative’s Sustainability Report Guide, version G4.

The organisation's characteristics have been taken into account, as well as the expectations of the stakeholders who give their opinion through the various processes described in this report.

This Sustainability Report covers all Grupo Cortefiel corporate activities for the various brands and structured businesses. Where there are limitations in some content, this is detailed in the relevant report section or in the GRI index, evidence of our commitment to working on internal data management to provide the fullest information possible.

This report covers the financial year 2015/16, from 1 March 2015 to 29 February 2016.

The only change in the scope of consolidation in the year ended 29 February 2016 was: On 20 May 2015, the subsidiary Cortefiel, S.A. incorporated Euromoda Importadora México SA de CV in México. The fully subscribed and paid share capital amounted to EUR 3 thousand.

This is the tenth Sustainability Report that follows the GRI standard, thus honouring our commitment to publish our results on an annual basis. Like the previous report, it is presented in an audiovisual format and there is no printed version of the content.

The following basic criteria apply to all content shown:

  • The data presented is accurate as of 29 February 2016, unless otherwise stated.
  • All the information and data obtained from the various Cortefiel Group internal management systems have been provided by the heads of the different areas.
  • Information is not exclusively limited to quantitative indicators, but rather complementary qualitative information makes it possible to provide a suitable sustainability assessment.
  • Video images are real and make content easier to understand, presenting the reality of the company. They were recorded in company headquarters, warehouses, stores, and on supplier premises in China, Turkey, and Morocco.
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Materiality

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed posuere faucibus pellentesque. Fusce scelerisque ante sit amet aliquam finibus. Morbi sed sapien eget est egestas pellentesque id sit amet diam. Sed eget porttitor tortor, vitae facilisis arcu. In consectetur iaculis metus at aliquet. Donec nulla nisi, euismod sed dolor et, varius bibendum turpis. Sed et mauris dapibus, vulputate enim id, mattis ex. Fusce suscipit est interdum odio eleifend, at sagittis nibh fringilla. Mauris nec nibh vel nibh consectetur ornare id at odio. Pellentesque habitant morbi tristique senectus et netus et malesuada fames ac turpis egestas. Fusce ac dolor lectus. Donec finibus, orci eget finibus convallis, tellus ex eleifend elit, quis volutpat lectus magna a augue. Fusce iaculis, tellus ornare tempus consequat, urna lacus placerat arcu, at molestie nulla orci et est.

Maecenas nisl justo, lobortis et libero nec, suscipit volutpat enim. In lobortis mollis ligula. Quisque ut maximus risus. Vivamus vitae cursus purus. Fusce sit amet lectus id est fermentum fringilla nec nec eros. Nunc sit amet sem sed dui fermentum lobortis in nec ipsum. In sit amet nisi eget augue venenatis viverra. Duis maximus nulla quis purus ornare, et scelerisque mi sodales. Phasellus faucibus turpis vel nibh congue ultricies. Praesent a sagittis ante. Integer vitae ultrices orci, id luctus sem. Nunc vitae nisi mattis, scelerisque tellus sit amet, molestie mi. Nam sem lorem, auctor eu pellentesque eget, posuere vel ipsum. Donec vehicula rutrum viverra.

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External Assurance

Grupo Cortefiel ensures that all activities and figures are truthful and reflect reality. Our objective of achieving maximum transparency and credibility in this report is strengthened by the independent validation process for both its content and methodologies.

Bureau Veritas Certification has performed the external validation of the 2015 Audiovisual Report through two complementary processes:

  • Verification of information and data traceability,
  • Validation of content relevance in accordance with GRI requirements (in compliance with the materiality principle).

These approaches have followed systematic procedures and have been performed in a fully independent, unbiased manner, with no conflict of interest. Process leaders have had the necessary resources and have had access to all the information, facilities, records and files which they deemed as necessary for the task.

As a result, Bureau Veritas Certification has issued its independent report, which is available to interested parties, and the corresponding conformity certificate, which is appended to this report.

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Global Reporting Initiative

Note
Report sections

GRI INDEX

G4: GENERAL STANDARD DISCLOSURES OVERVIEW

STRATEGY AND ANALYSIS

ORGANIZATIONAL PROFILE

G4-16
The Group is present in numerous national and international sectorial organizations, and participates actively through its committees and working groups: ACME, ACOTEX, AMRE, ANGED, ASECOM, ASEPAM, CEOE, CEIM, CEA, EBCA, FEDECON, Foundation LEALTAD, Foundation SERES, FMRE and ISEM.

DENTIFIED MATERIAL ASPECTS AND BOUNDARIES

STAKEHOLDER ENGAGEMENT

G4-27
An internal working committee comformed by the managers responsible for the most significant areas of the company (Financial, Sourcing, Design, Marketing, Human Resources, Internal Audit, CSR, etc.) developed a matrix which identified the main stakeholders and balanced their interests in different values of sustainability, defined by the Group in the economic, environmental and social aspects.

REPORT PROFILE

GOVERNANCE

G4-40
The General Shareholders Meeting shall appoint the directors, making all possible efforts to ensure that the chosen candidates are persons os proven solvency, experience and competence.
G4-41
Administrators are required to inform the Management Committee and the General Shareholders Meeting of any situations of direct or indirect conflict that may arise and that may affect the company's interests. The affected administrator shall refrain from intervening in these agreements. Administrators are likewise required to communicate any direct or indirect capital interest held either by them or associated persons in companies with the same, similar or complementary activity as the corporate object, and shall likewise provide details of any positions held and the functions they perform. Details of all conflicting interests shall be provided in the report.
G4-51
Board of Director Members do not receive any compensations for their condition as accorded in the statutes. Only the CEO as Executive Director receives a compensation. The Chairman (non-executive) receives a fee for his professional assistance to the company. The Steering Committee receives a variable fee depending on the organization's performance.
G4-52
Board of Director Members do not receive any compensations for their condition as accorded in the statutes. Only the CEO as Executive Director receives a compensation. The Chairman (non-executive) receives a fee for his professional assistance to the company. The Steering Committee receives a variable fee depending on the organization's performance.
G4-53
Board of Director Members do not receive any compensations for their condition as accorded in the statutes. Only the CEO as Executive Director receives a compensation. The Chairman (non-executive) receives a fee for his professional assistance to the company. The Steering Committee receives a variable fee depending on the organization's performance.

ETHICS AND INTEGRITY

G4: SUMMARY OF THE BASIC SPECIFIC CONTENTS

CATEGORY: ECONOMIC

ECONOMIC PERFORMANCEG4-DMA

G4-EC2
Although the activity of Grupo Cortefiel has no direct financial implications on climate change, develop numerous measures to minimize risks.
G4-EC4
Not material. The subsidies received are not significant and they are mainly for employees' training.

MARKET PRESENCEG4-DMA

INDIRECT ECONOMIC IMPACTSG4-DMA

G4-EC7
Not applicable. No significant investments are made for infrastructure developments, as they are not directly linked to the development of the business.

PROCUREMENT PRACTICESG4-DMA

CATEGORY: ENVIRONMENTAL

MATERIALSG4-DMA

ENERGYG4-DMA

EMISSIONSG4-DMA

PRODUCTS AND SERVICESG4-DMA

G4-EN28
The packaging that arrive at the final customer are managed by the Integrated Systems of Management (ECOEMBES).

COMPLIANCEG4-DMA

G4-EN29
In 2015, no fines or sanctions for non compliance with environmental laws and regulations.

TRANSPORTG4-DMA

GENERALG4-DMA

G4-EN31
Not material. Quantitative information not available as they are included as operational expenses.

SUPPLIER ENVIRONMENTAL ASSESSMENTG4-DMA

ENVIRONMENTAL GRIEVANCE MECHANISMSG4-DMA

G4-EN34
In 2015, no significant grievances about environmental issues.

CATEGORY: SOCIAL

LABOR PRACTICES AND DECENT WORK

EMPLOYMENTG4-DMA
G4-LA2
Grupo Cortefiel applys the same benefits to employees with part-time or temporary.
LABOR/MANAGEMENT RELATIONSG4-DMA
OCCUPATIONAL HEALTH AND SAFETYG4-DMA
TRAINING AND EDUCATIONG4-DMA
DIVERSITY AND EQUAL OPPORTUNITYG4-DMA
EQUAL REMUNERATION FOR WOMEN AND MENG4-DMA
SUPPLIER ASSESSMENT FOR LABOR PRACTICESG4-DMA
LABOR PRACTICES GRIEVANCE MECHANISMSG4-DMA
G4-LA16
In 2015, no significant incidents related to labour practices.

CATEGORY: SOCIAL

HUMAN RIGHTS

INVESTMENTG4-DMA
G4-HR2
In 2015, 1,039 people have been trained in its implementation of the Code of Conduct.
NON-DISCRIMINATIONG4-DMA
G4-HR3
In 2015, no significant incidents related to discrimination issues.
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAININGG4-DMA
CHILD LABORG4-DMA
FORCED OR COMPULSORY LABORG4-DMA
SECURITY PRACTICESG4-DMA
G4-HR7
Not applicable. Grupo Cortefiel does not hire any security personnel, except for security at the stores, where authorized companies with trained staff are outsourced.
INDIGENOUS RIGHTSG4-DMA
G4-HR8
In 2015, no incidents involving rights of indigenous people.
ASSESSMENTG4-DMA
SUPPLIER HUMAN RIGHTS ASSESSMENTG4-DMA
HUMAN RIGHTS GRIEVANCE MECHANISMSG4-DMA
G4-HR12
None of the audits performed over the 2015 business years has shown serious deviations on which corrective action could not be taken and which entailed supplier rejection. The main deviations found in code of conduct audits are due to the following reasons: Insufficient documents to verify employee working hours; salaries under local minimum, and insufficient health and safety measures.

CATEGORY: SOCIAL

SOCIETY

LOCAL COMMUNITIESG4-DMA
ANTI-CORRUPTIONG4-DMA
G4-SO3
68,58% of the business, representing 79,62% of sales, has been analyzed during 2015. The main risks that have been identified are related to internal fraud which is managed from the Iternal Audit deparment.
G4-SO4
Training courses have been carried out for sales managers with a total of 1,039 people during 2015.
G4-SO5
88 internal audit investigations have been elaborated in 2015 with measures aimed at solving incorrect practices or with specific disciplinary measures.
PUBLIC POLICYG4-DMA
G4-SO6
Grupo Cortefiel does not participate in financing any political parties.
ANTI-COMPETITIVE BEHAVIORG4-DMA
G4-SO7
In 2015, no legal actions for monopoly practices or anticompetitive behavior.
COMPLIANCEG4-DMA
G4-SO8
In 2015, no significant incidents concerning non-compliance with regulations.
SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETYRESG4-DMA
GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETYG4-DMA
G4-SO11
In 2015, no grievances about impacts on society.

CATEGORY: SOCIAL

PRODUCT RESPONSIBILITY

CUSTOMER HEALTH AND SAFETYG4-DMA
G4-PR2
In 2015, no significant incidents concerning health and safety impact on products.
PRODUCT AND SERVICE LABELINGG4-DMA
G4-PR4
In 2015, no significant incidents of non compliance concerning product information and labelling.
MARKETING COMMUNICATIONSG4-DMA
G4-PR6
Not applicable.
G4-PR7
In 2015, no significant incidents of non compliance concerning the supply and use of products or services.
CUSTOMER PRIVACYG4-DMA
G4-PR8
In 2015, no significant incidents for non compliance concerning customer privacy or losses of customer data.
COMPLIANCEG4-DMA
G4-PR9
In 2015, no significant incidents for non compliance concerning the supply and use of products or services.
General basic contents
Specific basic contents
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Global Compact of the United Nations

Grupo Cortefiel signed up to the United Nations Global Compact in 2002. Since then, it has submitted progress reports on an annual basis to inform its stakeholders, as well as society in general, about its progress towards commitments made upon subscribing to the Global Compact Principles.

It follows best practice for the preparation of Global Compact progress reports and, given the analysis performed on the Sustainability Report’s materiality and content relevance, integrates the topics aligned with the 10 Global Compact principles which can be found in different report points, linked to the indices required by Global Reporting Initiative.

Un Global Compact - Network Spain - We support
AREA UN GLOBAL COMPACT PRINCIPLES GRI 4 INDICATORS
Human Rights Principle 1. Businesses should support and respect the protection of internationally proclaimed human rights. G4‑HR2, G4‑HR7, G4‑HR8, G4‑HR9, G4‑HR12, G4‑SO1, G4‑SO2
Principle 2. Business should make sure they are not complicit in human rights abuses. G4‑HR1, G4‑HR10, G4‑HR11
Labour Principle 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. G4‑11, G4‑HR4, G4‑LA4
Principle 4. Businesses should uphold the elimination of all forms of forced and compulsory labour. G4‑HR6
Principle 5. Businesses should uphold the effective abolition of child labour. G4‑HR5
Principle 6. Businesses should uphold the elimination of discrimination in respect of employment and occupation. G4‑10, G4‑EC5, G4‑EC6, G4‑LA9, G4‑LA11, G4‑LA12, G4‑LA13, G4‑HR3
Environment Principle 7. Businesses should support a precautionary approach to environmental challenges. G4‑EC2, G4‑EN1, G4‑EN3, G4‑EN8, G4‑EN15, G4‑EN16, G4‑EN17, G4‑EN20, G4‑EN21, G4‑EN27, G4‑EN31
Principle 8. Businesses should undertake initiatives to promote greater environmental responsibility. G4‑EN29, G4‑EN30, G4‑EN31, G4‑EN32, G4‑EN33, G4‑EN34
Principle 9. Businesses should encourage the development and diffusion of environmentally friendly technologies. G4‑EN6, G4‑EN7, G4‑EN19, G4‑EN27, G4‑EN31
Anti-corruption Principle 10. Businesses should work against corruption in all its forms, including extortion and bribery. G4‑56, G4‑57, G4‑58, G4‑SO3, G4‑SO4, G4‑SO5, G4‑SO6


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Contact

This 2015 audiovisual Sustainability Report is available on-line in both spanish and english languages, in the Grupo Cortefiel's official website. www.grupocortefiel.com.

Para cualquier consulta o información adicional rogamos se dirija a: prensa@grupocortefiel.com


Grupo Cortefiel:

Área Corporativa.

Avenida de Llano castellano Nº 51.

28034, Madrid.

España.

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