GRUPO CORTEFIEL

Sustainability Report 2016

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Grupo Cortefiel
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01Grupo Cortefiel

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The Company

Basic Information 2016

1880
Established
1.982
Points of sale
1.299
Directly operated stores
683
Franchises
1.128
Turnover in Million of Euros
94
Million garments sold
10.394
Employees
89
Countries (Physical and/or online stores)

Data as of February 28, 2017.

Evolution of points of sale

The Company

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01Grupo Cortefiel

CEO Message 2016

Grupo Cortefiel understands that sustainable growth is essential to the ongoing advancement of our leadership strategy in fashion retail. This Sustainability Report illustrates how the new Strategic Plan is guiding us toward improvements in corporate processes and in the chain stores that comprise the Group’s universe.

Since our inception, the fundamental tools of operating efficiency and specialisation have served to fortify our position. The 2016 results contained in this report speak for themselves about the strength of our company, if we do things right.

The fiscal year covered herein, which begins March 1, 2016 and ends February 28, 2017, was positive for the Group, enabling us to confirm that we are on the road to recovery under the new plan. We obtained sales growth of 3% relative to 2015, righting the course and overcoming an adverse first half with the aid of this corrective plan.

As an example of our improvement, recurring EBITDA relative to overall revenues for the fiscal year ending February, 28 reached 10.17% of sales, compared to 9.89% from the previous year, totalling EUR 114.69 million with growth of 5.91%.

Our global offer is based on a successful international expansion policy that involves an increase in the number of stores and the consolidation of the franchise system with partners who are more committed to customers and to us. In terms of our own management, we are committed to profitable stores in all markets.

We are committed to revamping our sales formats to give customers a 360º shopping experience. Omni-channelling is now a reality and e-commerce has become an indispensable channel for customer service and business profitability.

We have implemented a redesign for Cortefiel’s actual customers by repositioning the brand and offering more fashion, more quality, and more added value to our 45+ target segment.

Women’secret continues its positive trend: sales rose again by 13.31%, establishing it as Spain’s number one lingerie brand.

Although Springfield obtained poorer-than-expected results in 2016, a trend that we are reversing through engagement with the main target segment (25 and 35 year olds), it remains the Group’s leading firm in terms of sales and EBITDA generation, both in Spain and abroad.

We closed this fiscal year with consolidated turnover of EUR 1.128 billion, corresponding to the aforementioned boost in sales. The company’s strategic objectives focus on the growth of all brands with its own stores as well as profitable franchises.

In addition, we are working to develop a plan to maximise efficiency through extraordinary measures, thanks to a management team that is dedicated to the project and focused on managing mass-market premium brands with motivated and effective staffs.

Achieving these goals makes us more aware of the need for sustainable growth. Sustainability must be the golden rule that informs all of the decisions we make on a daily basis. To that end, we have an engaged and responsible workforce that is aware of the importance of results, customer service, and our social and environmental commitment.

For years, Corporate Social Responsibility has played a strategic and transverse role at Grupo Cortefiel, continually providing us with value. We are aware of our transformative capacity as a Group and the positive impact that our messaging has on society.

For that reason, we have no reservations about putting our awareness potential to work to solve problems that affect and concern the citizenry, such as the transparency and best practices of organisations, the support and improvement of developing countries, women’s health, and the future of our youth.

Women´secret continues to work to improve the quality of life after surgery for women with breast cancer through successful initiatives like the “Special Post-Surgery Bras” project, in conjunction with the Dexeus women’s health clinic.

We support and collaborate with the most prestigious universities in our country of origin to promote the research and development of the fashion industry, while serving as a mechanism to incorporate young talent into the workforce.

Our Involucrados Project is made possible by the volunteer work of our employees and social organisations. Over its 11-year history, it has become the symbol of our social endeavours.

I am grateful for the commitment of everyone to work toward a sustainable culture and convert that into tangible actions every day. Much has been done, but much remains to be done. There are big challenges before us, but overcoming adversity is part of our DNA, and we are encouraged for the future we are building.

Jaume Miquel Naudí

CEO

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01Grupo Cortefiel

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History
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01Grupo Cortefiel

Board of Directors 2016

Mr. Miguel Ibarrola López

Non-Executive Chairman

Mr. Federico Conchillo Armendariz

Director - Propietary

Mr. Jaume Miquel Naudí

CEO - Executive

Theatre Directorship Services Alpha, S.ar.l. Represented by: Mr. Javier de Jaime Guijarro

Director - Propietary

Mr. Carlos Mallo Álvarez

Director - Propietary

Theatre Directorship Services Alpha, S.ar.l. Represented by: Mr. José Antonio Torre de Silva and López de Letona

Director - Propietary

Mr. Pedro López de Guzmán

Director - Propietary

Mr. Ricardo de Serdio Fernández

Director - Propietary

Mr. Ramón Hermosilla Gimeno

Secretary - Non Director









   * Mr. Miguel Ibarrola López substituted the Non-Executive Chairman Mr. Francisco Javier Campo.

 ** Mr. Jaume Miquel Naudí substituted the Chief Executive Officer Ms. Berta Escudero Pereira.

*** Mr. Federico Conchillo Armendariz substituted the Director Mr. Michel Maurice Paris.

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01Grupo Cortefiel

Management Committee 2016

Jaume Miquel

Chief Executive Officer, Grupo Cortefiel

Manuel Serrano

Chief Financial Officer

Ramón Amorós

HR Director

Antonis Kyprianou

Franchise General Manager

Manel Jiménez

Supply Chain General Manager

Marie Castellví

General Manager, Cortefiel and Pedro del Hierro

Luis González

General Manager, Springfield

Eva Romeo

General Manager, Women'secret

Raúl Ramirez

General Manager, Fifty Factory

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01Grupo Cortefiel

Abstract of Directors' Report for the year ended 28 February 2017
Cortefiel, S.A. and Subsidiaries

Economic backdrop and performance of the industry and businesses

In the year ended 28 February 2017 the Spanish economy continued to show signs of improvement, which began in 2015, with respect to the economic decline experienced in prior years, which had a particular impact on consumption. The easing of tensions in the European markets, together with the supranational institutions' recognition of the efforts made internally, have led to an improvement in the confidence of the players in the Spanish economy. Even though the signs of change in the main economic indicators have been positive, the political uncertainty throughout most of 2016 had a slowing effect on the economy.

GDP growth in the Eurozone (the main market in which the Group operates through its own stores) was 1.8% in 2016, compared with 1.6% in 2015. In Spain GDP growth stood at 3.2%, continuing the growth observed in 2015.

In 2016 there was a 1.8% increase in consumption in Spain as a result of the decrease in the unemployment rate, which fell to 18.7% from 21.07% in 2015, and the improvement in the consumer confidence index. However, the political uncertainty throughout most of 2016 led to slower growth compared with 2015. To a greater or lesser extent this trend was observed in all sectors of the retail trade (food, personal goods, household appliances, etc.). In this connection the year-on-year growth of the personal goods trade was 2.8%.

Specifically in Spain, the textile retail industry continues to perform at levels below those of 2006, with a slight decline in 2016 after two consecutive years of growth. In 2016 the textile trade fell by 2.2% in global terms.

Additionally, the stability in terms of Euro/Dollar parity and the improvement in the exchange rate of the Russian rouble had a positive effect on the Group's business performance.

2016/17 was a turning point, especially in the second half of the year, as a result of the measures implemented by the new management team, in which:

  • The international business, both in own stores and franchises, performed positively.
  • Women Secret continued to record an upward trend in results both in terms of like-for-like sales and contribution margin.
  • The digital business continued to grow with significant margin protection and a multi-channel offering.
  • Cortefiel and Pedro del Hierro successfully implemented their repositioning, which became effective in the last quarter of 2016 and will continue to be implemented in 2017/18.
  • Springfield refocused its strategy in order to strengthen its commitment to its traditional target public.
  • In the second half of 2016/17, restructuring took place at all levels in order to:
    • Speed up the strategic repositioning of Cortefiel and Pedro de Hierro.
    • Improve profitability of the store portfolio, with closure of the unprofitable stores.
    • Generate efficiency and increased productivity at store, chain and corporate department level.
    • Implement new processes to safeguard profitability and avoid, to the extent possible, volatility of the fashion business.

Against this backdrop the Group obtained a 3% increase in income. The Group's like-for-like sales increase was 0.2%. In Spain, the Group's main market, sales fell by 0.25%, whereas in the international market they increased by 1.73%. The Women Secret chain's increase in sales offset the decrease in sales recorded by the Springfield and Cortefiel chains, which in 2016/17 underwent a price and offer repositioning process. The market trend in recent years was consolidated with an across-the-board shift of sales in the industry to the sales seasons and an increase in special offers.

After a difficult first quarter, especially for the Cortefiel chain, the third and fourth quarters showed signs of improvement and began to reflect the first results of the measures implemented by the new management team.

The accompanying consolidated financial statements, prepared under International Financial Reporting Standards as adopted by the European Union, reflect the performance of the companies that make up the Consolidated Group of Cortefiel S.A. and subsidiaries for the period from 1 March 2016 to 28 February 2017.

The detail of the income included in the consolidated statement of profit or loss for the year ended 28 February 2017 is as follows:

Thousands of Euros
In-store sales 997,025
Wholesale and franchise sales 115,715
Revenue 1,112,740
Services 2,732
Rental income 216
Royalties 893
Other operating income 11,539
Other income 15,380

Based on the information available on the market share in Spain, the Group's main market, Women Secret continued to lead its sector, with a slight 0.2% decrease in its market share, whereas Springfield Man, which recorded a decrease of 0.1%, continued to be the leader for the 20-39 year-old segment, and was the second brand for the 20-29 year-old segment. Cortefiel recorded a slight decrease in the men's segment and a slight increase in the women's segment.

The Group's international performance, through both own stores and franchises, was positive. The international business represented 32% of the Group's sales and 51.7% of its EBITDA. The Group continued to expand in Russia, Mexico and the Balkans area, with significant improvements in both revenue and contribution to consolidated EBITDA, while the growth of the business in Portugal was consolidated in the year.

Additionally, Group sales via franchises increased by 8.5% compared with 2015/16, with a particularly notable performance in the European and MENA markets. The EBITDA contributed by the franchise business was EUR 37.7 million. Sales to franchisees accounted for 30.3% of the Group's international business.

Sales via the internet grew by 27.3%, with a 39.1% increase in consolidated EBITDA, although this sale channel's contribution to profits is still small as it is in the development and expansion phase. The internet business is one of the cornerstones of the Cortefiel Group's strategy.

The Group's margin fell (to 57.26% in 2016/17 from 58.61% in 2015/16) amidst a scenario of high competitiveness in prices and adverse weather conditions at some point during the year. The margin was affected by the Cortefiel brand strategy during the first few months of 2016/17. The decisions made by the new managers in the second half of 2016/17 had a positive impact on the margin in these second six months of the year, with significant improvements in the Cortefiel chain.

At 28 February 2017 the Cortefiel Group had 1,982 sales outlets, a 3.7% increase compared with 2015/16. This figure includes own stores, corners, and franchise stores. In the year ended 28 February 2017, 67 Group-managed stores were opened, 26 of which are located outside Spain. As a result of the closure of certain stores, in 2016/17 the increase in owned retail space was not significant.

The financial management of the business continued to focus on improving management of working capital and on rigorous control of the allocation of investments for the opening and renovation of stores, which in turn enabled an increase in cash-flow generation.

In addition, as explained in the accompanying notes to the consolidated financial statements, in 2016/17 negotiations took place with the banks involved in the Group's syndicated financing with the aim of renegotiating certain terms and conditions thereof. Finally, in March 2016 an agreement was reached with the financing banks to modify the maturity date of the debt, which was set at March 2018.

EBITDA from continuing operations for the year ended 28 February 2017 amounted to EUR 75.7 million, compared with EUR 104 million in the preceding year.

As indicated in the consolidated financial statements, earnings were significantly affected by the cost of the measures put in place by the new management team:

  • The strategic repositioning of the Cortefiel chain, which involved a renewal of product design and the implementation of a new price strategy in order to adapt the chain to the needs of its customers. This repositioning, the implementation of which has already resulted in a significant improvement in the sales figures for the first few months of 2017/18, made it necessary for the surplus merchandise from previous seasons that was not in line with the new commercial strategy to be placed in clearance sales at the outlets, at very reduced prices, or even to be destroyed. This had a negative effect on the Group's gross profit, and led to the need to recognise an additional write-down under "Inventories".
  • The closure of unprofitable stores or those which did not fit in with the new commercial strategy, both in Spain and abroad. These store closures, which have been carried out gradually since their approval in January 2017 and will continue into the next few months, have at times led to the need to adjust the commercial staff of the stores concerned and, where appropriate, to the payment of certain compensation to the lessors of the store premises for the early termination of the leases.
  • The establishment of new productivity criteria relating to the number of employees in each store. The rationale underlying these criteria will continue to be a basis for management approach in the future.
  • Changes to core personnel: In order to adjust general costs and also to adapt them to the new commercial strategy, the Group decided to redefine certain head office positions and adjust the workforce to the Group's current and forecast level of business.

Recurring EBITDA for 2016/17 amounted to EUR 114.7 million, after deducting EUR 39 million of non-recurring expenses (employee termination benefits and lessor compensation, write-down of stock as a result of the renewal process and the Cortefiel chain's change in strategy, and other costs),compared with EUR 108.3 million in 2015/16. Therefore, recurring EBITDA/total income for the year ended 28 February 2017 was 10.17%, compared with 9.89% for the year ended 29 February 2016.

The Group's net bank borrowings increased by EUR 21 million.

The loss before tax from continuing operations in 2016/17 amounted to EUR 24.8 million and the attributable net loss was EUR 22.9 million.

Outlook

According to analysts, the change in trend of the overall situation of the Spanish economy will continue, with improvements in consumption levels, an increase in the level of credit granted and a slight improvement in the unemployment and hiring rates. It is also expected that the Portuguese economy will continue to perform well, whereas the rest of Europe will foreseeably experience a certain degree of stagnation.

The Group's directors will continue to develop reorganisation measures and new businesses, aimed at reactivating, to the extent possible, the cash generation levels required to meet its commitments in full.

The main objectives for 2017/18 are to improve like-for-like sales in order to make better use of the existing retail space, expand through own stores in the Springfield and Women Secret chains, complete the plan to close unprofitable stores which commenced in the last quarter of 2016/17, improve gross profit, strengthen the Group's internalisation process through its franchise business (new agreements and support for our franchisees in their organic growth), increase and strengthen the online business, protect and increase the various chains' market share (especially the women's segment), increase advertising expenditure to support the forecast growth in like-for-like sales and optimise and control investment and expenses.

Throughout 2017/18 the global profitability and efficiency plan, implemented by the new management team in the second half of 2016/17, will take effect.

New processes with clear profitability and efficiency criteria will also be established, ensuring the alignment of all the organisation's departments.

The financial efficiency and commercial and operational effectiveness criteria pursued by the shareholders and the management team, with special importance currently being attached to the cost containment and margin protection policies, will make it possible to successfully harness the current economic revival in the main markets in which the Group operates. In this connection, the only significant cost increases forecast are those related to the international expansion process, the strengthening of the online business and advertising.

Events after the reporting period

The Cortefiel Group has performed very well in the first few months of 2017/18, due mainly to the effects of the streamlining and improvement measures implemented in the second half of 2016/17 in relation to the strategic repositioning of the Cortefiel chain and the closure of unprofitable stores, resulting in significant increases in like-for-like sales and margin percentages, in both cases over and above the budgeted figures.

This improvement in the Cortefiel Group’s position, which entails a reduction in the debt-equity ratio, will make it possible to consider the possibility of strengthening equity and to achieve a new long-term financial structure.

As indicated in the notes to the consolidated financial statements, the Parent’s directors and its majority shareholder are assessing possible actions aimed at seeking new sources of financing and/or possible investors which could provide sufficient liquidity to settle the liabilities of the Group to which the Parent belongs within the new periods established. In this connection, although the Group's current debt structure is scheduled to mature in March 2018, the Parent's directors began actively managing this structure from the beginning of 2017/18.

2015 2016 Var %
BALANCE SHEET


Non financial fixed assets 332.33 299.48 -9.89
Financial fixed assets 98.61 103.77 5.24
Stock 162.15 157.62 -2.79
Customers 25.08 22.62 -9.81
Commercial suppliers 268.33 252.62 -5.86
RESULTS


Total discontinued operations income 1,095.17 1,128.12 3.01
Gross margin / Income 59.0% 57.8% -1.89
Operating profit 35.28 11.87 -66.36
Recurring EBITIDA 108.29 114.70 5.91
MANAGEMENT RATIOS


Stock / Sales 14.9% 14.2% -5.15
Customers / Sales 2.3% 2.0% -12.00
Suppliers / Sales 24.7% 22.7% -8.14

Data in millions of Euros as of February 28, 2017.

Main figures

Financial Information

Data in millions of Euros as of February 28, 2017.

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

Income

Financial Information

Data in thousands of Euros as of February 28, 2017.

Chain income

Financial Information

Data as of February 28, 2017.

Chain income

Financial Information

Data in millions of Euros as of February 28, 2017.

Distribution of expenditures

Financial Information

Data as of February 28, 2017.

Remuneration of employees

Financial Information

Data in millions of Euros as of February 28, 2017.

Investments

Financial Information

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
Cortefiel Commercial, S.A. Fribourg 100 Logistics centre and sales to franchises Deloitte
Springfield Hungary Trading Kft. Székesfehérvár 100 Retailing Deloitte
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 (b) Sofia 100 Retailing Unaudited
Cortix D.o.o Podgorica (b) Podgorica 100 Retailing Unaudited

COMPANIES CONSOLIDATED BY THE METHOD OF POSITIONING IN EQUIVALENCE

Group Company Location Percentage of Ownership (a) Business Activity Auditor
Scarfil Retail Management Company Limited Hong-Kong 25 Retailing Unaudited
Anekis S.A. Madrid 24,75 Marketing Deloitte
Multifiel Madrid 50 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.

Subsidiaries

Financial Information

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01Grupo Cortefiel

KEY FACTS 2016 - 2017

  • FEBRUARY 2016

    The 'Involved' initiative reaches one million euros on its tenth anniversary.

  • FEBRUARY 2016

    Obtained the Top Employers 2016 Spain Certification.

  • MARCH 2016

    The firm Pedro del Hierro was present at the Paris exposition “Made in Spain: la mode au delà des frontières”.

  • MARCH 2016

    New E-commerce logistics platform in Tarancón, Cuenca.

  • APRIL 2016

    Aranjuez logistics center starts its second Bombay sorter.

  • APRIL 2016

    Cortefiel opens its first franchises in Russia.

  • APRIL 2016

    Pedro del Hierro opens its first store in Guatemala.

  • MAY 2016

    Women’secret opens a new store in Johannesburg.

  • MAY 2016

    Inauguration of Springfield’s first new concept store in Budapest.

  • AUGUST 2016

    Naming of Jaume Miquel as CEO of Grupo Cortefiel.

  • SEPTEMBER 2016

    All of the Group’s brands open their first stores in Iceland .

  • OCTOBER 2016

    Women’secret launches its first store in the city of Casablanca.

  • JANUARY 2017

    Donated more than 130,000 € to the Involved Project 2016.

  • JANUARY 2017

    Cortefiel inaugurates fagship store en Catar.

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01Grupo Cortefiel

1,982 points of sale in 89 Countries

29
Online Markets
Cortefiel Pedro del Hierro Springfield Women'secret Fifty Factory Total
Spain 140 9 331 275 49 804
Albania 1 - 1 - - 2
Andorra 2 - 4 2 - 8
Armenia - - - 1 - 1
Austria - - 2 - - 2
Belarus - - 2 5 - 7
Belgium 2 - 22 14 - 38
Bosnia 1 - 7 4 1 13
Bulgaria 1 - 2 1 - 4
Croatia - - 8 8 - 16
Cyprus 8 - 14 3 - 25
Czech Republic - - 2 1 - 3
Estonia 3 1 3 5 - 12
France - - 55 3 - 58
Georgia 1 - - - - 1
Germany - - 11 - - 11
Gibraltar - - 1 1 - 2
Greece - - - 4 - 4
Hungary - - 12 9 - 21
Iceland 1 - 1 1
3
Ireland - - 11

11
Italy - - 43 - - 43
Latvia 2 - 1 2 - 5
Lithuania 1 1 2 2 - 6
Luxembourg - - 5 1 - 6
Macedonia - - 4 1 - 5
Malta 1 - 3 2 - 6
Montenegro 1 - 1 2 - 4
Norway - - 1 1 - 2
Poland - - 7 - - 7
Portugal 24 - 60 48 8 140
Romania - - 2 3 - 5
Russia 8 - 29 47 - 84
Serbia 1 - 14 15 - 30
Slovakia - - 2 1 - 3
Slovenia - - - 2 - 2
Ukraine - 3 7 12 - 22
Total Directly Operated Stores + Franchise 198 14 670 476 58 1,416
Cortefiel Pedro del Hierro Springfield Women'secret Total
Bermudas - - - 1 1
Bolivia 1 1 2 2 6
Chile 4 - - 13 17
Colombia - - - 9 9
Costa Rica 1 - 3 2 6
Curaçao 1 - 1 1 3
Dominican Republic 1 - 2 2 5
Ecuador 10 - 18 9 37
Guatemala - 1 1 1 3
Mexico 24 - 42 43 109
Panama - - - 1 1
Paraguay - - 1 2 3
Peru 6 - 14 2 22
Uruguay - - 2 - 2
Venezuela 3 - 5 6 14
Total Directly Operated Stores + Franchise 51 2 91 94 238
Cortefiel Springfield Women'secret Total
Angola 6 6 6 18
Algeria 1 1 4 6
Arab Emirates - 21 11 32
Bahrain - - 1 1
Egypt 4 7 7 18
Ghana - 2 1 3
Iran 1 9 5 15
Israel - 23 - 23
Jordan 2 3 2 7
Kuwait 3 2 7 12
Lebanon 2 11 3 16
Libya - 1 - 1
Marocco - - 1 1
Oman - - 1 1
Qatar 2 2 2 6
Saudi Arabia 9 11 39 59
Syria 1 - 2 3
South Africa - - 2 2
Tanzania 2 2 2 6
Tunez - 3 1 4
Total Directly Operated Stores + Franchise 33 104 97 234
Cortefiel Pedro del Hierro Springfield Women'secret Total
Azerbaijan - - - 2 2
China - - 28 - 28
Indonesia - - - 2 2
Kazakhstan 1 - 4 - 5
Kyrgyzstan - - 1 1 2
Malasya - - 5 - 5
Myanmar - - 2 1 3
Pakistan 1 1 - - 2
South Korea - - - 9 9
Thailand - - 5 3 8
The Philippines 2 8 13 5 28
Total Directly Operated Stores + Franchise 4 9 58 23 94
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
* Online sales through third parties.
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02
Group's Brands
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02Group's Brands

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Cortefiel

Basic Information 2016

1945
Established
286
Points of sale
40
Countries
319,946
Turnover in thousands of euros
28%
% of the Group´s Total Turnover
2,056
Employees

Data as of February 28, 2017.

Cortefiel - Development of points of sale

Cortefiel

Data as of February 28, 2017.

Cortefiel - Points of sale by country

Cortefiel

Data as of February 28, 2017.

Cortefiel - Openings 2016 by country

Cortefiel

Data as of February 28, 2017.

Cortefiel - Points of sale by country

Cortefiel

Data as of February 28, 2017.

Cortefiel - Openings 2016 by country

Cortefiel

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Pedro del Hierro

Basic Information 2016

1992
Established
311
Points of sale
25
Stand Alone (PdH Woman)
286
Cortefiel Store (PdH Man&Woman Spaces)
42
Countries
41
Employees (Stand Alone)
Independent PdH Woman Stores Directly operated stores Franchises TOTAL
Spain 9 - 9
Bolivia - 1 1
Estonia - 1 1
Guatemala - 1 1
Lithuania - 1 1
Pakistan - 1 1
Philippines - 8 8
Ukraine - 3 3
Total 9 16 25
Corners PdH in Cortefiel Stores Directly operated stores Franchises TOTAL
Spain 140 - 140
Albania - 1 1
Angola - 6 6
Andorra - 2 2
Argelia - 1 1
Belgium 2 - 2
Bolivia - 1 1
Bosnia 1 - 1
Bulgaria 1 - 1
Chile - 4 4
Cyprus - 8 8
Costa Rica - 1 1
Curaçao - 1 1
Dominican Republic - 1 1
Ecuador - 10 10
Egypt - 4 4
Estonia - 3 3
Georgia - 1 1
Iceland - 1 1
Iran - 1 1
Jordan - 2 2
Kazakhstan - 1 1
Kuwait - 3 3
Latvia - 2 2
Lebanon - 2 2
Lithuania - 1 1
Malta - 1 1
Mexico 12 12 24
Montenegro 1 - 1
Pakistan - 1 1
Peru - 6 6
Philippines - 2 2
Portugal 24 - 24
Qatar - 2 2
Russia - 8 8
Saudi Arabia - 9 9
Serbia 1 - 1
Syria - 1 1
Tanzania - 2 2
Venezuela - 3 3
Total 182 104 286
Independent PdH Woman Stores
+
Corners PdH in Cortefiel Stores
191 120 311
 

Data as of February 28, 2017.

Pedro del Hierro - Points of sale by country

Pedro del Hierro

Independent PdH Woman Stores Directly operated stores Franchises TOTAL
Guatemala - 1 1
Pakistan - 1 1
Ukraine - 2 2
Total 0 4 4
Corners PdH in Cortefiel Stores Directly operated stores Franchises TOTAL
Spain 10 - 10
Angola - 3 3
Argelia - 1 1
Chile - 1 1
Cyprus - 1 1
Estonia - 1 1
Iceland - 1 1
Pakistan - 1 1
Portugal 2 - 2
Qatar - 1 1
Russia - 8 8
Saudi Arabia - 2 2
Total 12 20 32
Independent PdH Woman Stores
+
Corners PdH in Cortefiel Stores
12 24 36
 

Data as of February 28, 2017.

Pedro del Hierro - Openings 2016 by country

Pedro del Hierro

Data as of February 28, 2017.

Pedro del Hierro - Points of sale by country

Pedro del Hierro

Data as of February 28, 2017.

Pedro del Hierro - Openings 2016 by country

Pedro del Hierro

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02Group's Brands

Watch video
Springfield

Basic Information 2016

1988
Established
923
Points of sale
66
Countries
459,444
Turnover in thousands of euros
41%
% of the Group´s Total Turnover
2,534
Employees

Data as of February 28, 2017.

Springfield - Development of points of sale

Springfield

Data as of February 28, 2017.

Springfield - Points of sale by country

Springfield

Data as of February 28, 2017.

Springfield - Openings 2016 by country

Springfield

Data as of February 28, 2017.

Springfield - Points of sale by country

Springfield

Data as of February 28, 2017.

Springfield - Openings 2016 by country

Springfield

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02Group's Brands

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Women'Secret

Basic Information 2016

1993
Established
690
Points of sale
69
Countries
280,693
Turnover in thousands of euros
25%
% of the Group´s Total Turnover
1,292
Employees

Data as of February 28, 2017.

Women'secret - Development of points of sale

Women'secret

Data as of February 28, 2017.

Women'secret - Points of sale by country

Women'secret

Data as of February 28, 2017.

Women'secret - Openings 2016 by country

Women'secret

Data as of February 28, 2017.

Women'secret - Points of sale by country

Women'secret

Data as of February 28, 2017.

Women'secret - Openings 2016 by country

Women'secret

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02Group's Brands

Basic Information 2016

1997
Established
58
Points of sale
18
Openings
2
Countries, Spain and Portugal
507
Employees

Data as of February 28, 2017.

Fifty Factory - Evolution of points of sale

Fifty Factory

Data as of February 28, 2017.

Fifty Factory - Points of sale by country

Fifty Factory

Data as of February 28, 2017.

Fifty Factory - Openings 2016 by country

Fifty Factory

Data as of February 28, 2017.

Fifty Factory - Points of sale by country

Fifty Factory

Data as of February 28, 2017.

Fifty Factory - Openings 2016 by country

Fifty Factory

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03
Responsible Commitment
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03Responsible Commitment

Management Approach

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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03Responsible Commitment

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 2016 Sustainability Report is intended to cover the most significant aspects of Grupo Cortefiel’s activities while 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 both for the company and its stakeholders, is based on quantitative and qualitative analysis, from both 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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03Responsible Commitment

Sustainable Development

At Grupo Cortefiel, we are committed to sustainable development throughout our entire value chain. Therefore, we take action to contribute to the achievement of the UN Sustainable Development Goals (SDG).
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03Responsible Commitment

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. Due to its size and diversity, it requires solid organizational support to help avoid legal and reputational risks, which guarantees the sustainability of its management model.

Our Code of Conduct is a reference point that 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 best 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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03Responsible Commitment

Ethics Committee

The Ethics Committee is the body to which all parties 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 Ethics Committee is appointed by the Commission of Audit and Risks with representatives from the departments of Human Resources, Internal Audit and Legal.

It is the body responsible for the 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.

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04
Customers Commitment
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04Customers Commitment

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Stores
Cortefiel

Cortefiel

Stores

Springfield

Springfield

Stores

Women'secret

Women'secret

Stores

Pedro del Hierro

Pedro del Hierro

Stores

Fifty Factory

Fifty Factory

Stores

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04Customers Commitment

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Customer Information
63
Million views of Grupo Cortefiel’s Website
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04Customers Commitment

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Customer Service
800.968
Managed emails
157.988
Incoming calls
37.997
Outgoing calls to solve issues
83.202
Resolved complaints and incidents
627,937 Operations

Data as of February 28, 2017.

Customer service

Customer Service

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04Customers Commitment

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Information Security
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04Customers Commitment

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Product Safety

Basic Information 2016

11,755
Patterns Analyzed
99,6%
Positive Chemical Tests
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04Customers Commitment

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Customer Loyalty Clubs
Club Cortefiel

Club Cortefiel

Customer Loyalty Clubs

Club Springfield

Club Springfield

Customer Loyalty Clubs

Club Women'Secret

Club Women'Secret

Customer Loyalty Clubs

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05
Employees Commitment
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05Employees Commitment

Watch video
Work Team

Distribution of employees by country

Work Team

Spain Global Staff data as of February 28, 2017.

Distribution by chain

Work Team

Data for Equivalent Workforce as of Frebuary 28, 2017.

Distribution by activity

Work Team

Global Staff data as of February 28, 2017.

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

Distribution by professional category

Work Team

Global Staff data as of February 28, 2017.

Distribution by type of contract

Work Team


Permanent % Temporary %
Spain 4,579 62% 2,760 38%
Germany 17 71% 7 29%
Austria 27 93%% 2 7%
Belgium 185 90% 22 11%
Bosnia 37 47% 41 53%
Bulgaria 33 100% - -
Croatia 8 8% 97 92%
France 153 99% 1 1%
Hungary 163 100% - -
Luxemburg 29 97% 1 3%
Mexico 223 87% 33 13%
Montenegro 11 50% 11 50%
Poland 19 51% 18 49%
Portugal 511 45% 635 55%
Russia 502 100% - -
Serbia 129 65% 70 35%
Others (*) 70 100% - -
Total 6,696 64% 3,698 36%

Global Staff data as of February 28, 2017.

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

Distribution by country and type of contract

Work Team

Data as of February 28, 2017.

Remuneration of employees

Work Team

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05Employees Commitment

Global Staff data as of February 28, 2017.

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

Distribution by country and gender

Talent and Equal Opportunities

Data for Equivalent Workforce as of Frebuary 28, 2017.

Distribution by activity and gender

Talent and Equal Opportunities

Global Staff data as of February 28, 2017.

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

Distribution by professional category activity and gender

Talent and Equal Opportunities


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 - 12 54 28 94
Middle Management (*) 3 102 180 81 366
Factory and Logistics Services Staff 2 - 12 4 18
Sales, Administrative Staff and Other 193 530 138 82 943
Total 198 644 384 195 1,421
WOMEN
Directors and Senior Management - 28 86 12 126
Middle Management (*) 13 455 525 49 1,042
Factory and Logistics Services Staff 6 - 13 6 25
Sales, Administrative Staff and Other 886 2,864 808 167 4,725
Total 905 3,347 1,432 234 5,918

Spain Global Staff data as of February 28, 2017.

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

Distribution by professional category, gender and age

Talent and Equal Opportunities

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05Employees Commitment

Training 2016

5,221
Employees have received training
71%
Employees have received training
13,843
Training assistants

Spain Global Staff data as of February 28, 2017.

Number of training hours

Training

SALES NETWORK PROGRAMS

12,093
Training assistants
56,940
Training Hours

Spain Global Staff data as of February 28, 2017.

Sales network - Assistants 2016

Training

Spain Global Staff data as of February 28, 2017.

Sales network - Hours 2016

Training


ASSISTANTS HOURS
IMPORTANT E-LEARNING PROGRAMS
Code of conduct 2.121 4.242
On boarding 770 12.140
Operating model 1.301 7.806
IMPORTANT CLASSROOM PROGRAMS
New managers program 99 3.168
New second-in command 239 3.680
Retail coaching 62 1.488

Spain Global Staff data as of February 28, 2017.

Sales network - Important programs

Training

Central services programs

1,750
Training assistants
13,600
Training Hours

Spain Global Staff data as of February 28, 2017.

Central services - Assistants 2016

Training

Spain Global Staff data as of February 28, 2017.

Central services - Hours 2016

Training


ASSISTANTS HOURS
IMPORTANT E-LEARNING PROGRAMS
Code of conduct 798 1.596
English digital program 85 3.956
IMPORTANT CLASSROOM PROGRAMS
English classroom program 128 2.325
Retail coaching 34 816

Spain Global Staff data as of February 28, 2017.

Central services - Important programs

Training

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05Employees Commitment

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Labour Relations
Top Employer 2016

Top Employer 2016

Labour Relations

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05Employees Commitment

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Work / Life Balance
TYPE OF WORKDAY MEN % WOMEN % TOTAL %
Employees with full-time workday 845 12% 2,396 33% 3,241 44%
Employees with part-time workday 576 8% 3,522 48% 4,098 56%
Total Employees 1,421 19% 5,918 81% 7,339 100%

Spain Global Staff data as of February 28, 2017.

Distribution of employees by workday

Work / Life Balance

MEN WOMEN TOTAL
MATERNITY / PATERNITY LEAVE
Employees with maternity leave - 355 355
Employees with part-time maternity leave - 1 1
Employees with paternity leave 40 - 40
Employees with transfer of the maternity leave to the father 3 - 3
Employees at risk during pregnancy - 317 317
REDUCTION IN WORKING HOURS / LEAVES
Employees with reduction in working hours for legal guardianship reason - children 9 693 702
Employees with reduction in working hours for legal guardianship reason - relatives - 4 4
Employees with reduction in working hours for personal reasons 1 30 31
Employees with temporary maternity leave 1 54 54
Employees leave for family care - 1 1
Employees with unpaid leave 33 106 139

Spain Global Staff data as of February 28, 2017.

Permissions and leave of absence

Work / Life Balance

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05Employees Commitment

2014 2015 2016
OCCUPATIONAL ACCIDENTS
Minor 113 122 537
Serious 0 0 0
Very serious 0 0 0
Fatal 0 0 0
ACCIDENTS TO AND FROM WORK
Minor 58 62 148
Serious 0 0 1
Very serious 0 0 0
Fatal 0 0 0
Total Accidents 171 184 686

Spain Global Staff data as of February 28, 2017.

Occupational accident

Health and safety

Spain Global Staff data as of February 28, 2017.

Health and safety training

Health and safety

Spain Global Staff data as of February 28, 2017.

Healthcare

Health and safety

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06
Supplier Commitment
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06Supplier Commitment

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Suppliers

Data as of February 28, 2017.

Number of active suppliers (garments, products and services)

Suppliers

Data as of February 28, 2017.

Distribution of payments to suppliers (garments, products and services)

Suppliers

Data as of February 28, 2017.

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

Suppliers

Data as of February 28, 2017.

Number of active suppliers by garments

Suppliers

Data as of February 28, 2017.

Distribution of garment sales by continent

Suppliers

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06Supplier Commitment

Watch video
Logistic Management

Basic Information 2016

5
Logistics Centers (Aranjuez, Toledo, Canarias, Mexico and Hong Kong)
146,000
m2 Storage Area
99,7
Million Garments Distributed
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06Supplier Commitment

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External Code of Conduct
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06Supplier Commitment

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Supply Chain Supervision

Data as of February 28, 2017.

Number of evaluated factories

Supply Chain Supervision

Data as of February 28, 2017.

Factories distribution by country

Supply Chain Supervision

07 Environment Commitment

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07
Environment Commitment
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07Environment Commitment

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Energy

Data as of February 28, 2017.

Logistic centers: Spain consumption data

Total electricity consumption

Energy


Electricity Consumption in Stores (kWh) kWh / Number of stores kWh / m2
Spain 79,483,761 98,860 283
Belgium 1,930,694 50,808 230
Bulgaria 186,620 46,655 188
France 1,034,815 64,676 256
Hungary 1,086,726 51,749 210
Luxembourg 367,535 61,256 227
Mexico 2,529,965 61,706 231
Portugal 11,798,597 84,276 255
Russia 826,126 12,149 99
Serbia 270,000 10,000 58
Total 99,514,839 84,335 266

Data as of February 28, 2017.

Consumption represent 98.6% of the total area (m2) of directly operated stores.

Electricity consumption in stores by country

Energy

Data as of February 28, 2017.

Electricity consumption in Spain

Energy

Data as of February 28, 2017.

Electricity consumption in stores - Spain

Energy

Data as of February 28, 2017.

Ratio of electricity consumption in stores - Spain

Energy

Data as of February 28, 2017.

Electricity consumption in logistics centres - Spain

Energy

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07Environment Commitment

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 demonstrated both in the Group’s direct operations and operations it influences, always seeking maximum efficiency and the best results. To this end, a Carbon Footprint measurement and management process has been initiated in order to take steps to launch the necessary measures to reduce the impact of greenhouse gases.

Total GHG Emissions 2016:
57,912 Tn CO2eq
Calculation period
March 1, 2016 to February 28, 2017.

Scope of calculations
Headquarters, Logistics Centres and Warehouses, and all directly operated stores.

GHG emissions were 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 burning fuel in stores and facilities.
Refrigerants
Leaked emissions from air conditioning in stores in Spain, Portugal and Belgium.
Vehicles
Emissions from vehicle fuel consumption (as they do not have their own fleet, this refers to hired vehicles only).
Scope 2
Indirect Emissions (Electricity)
Electricity
Emissions derived from electricity consumption at Headquarters, Aranjuez Logistics Centre (Madrid) and warehouses, and all directly operated stores.
Scope 3
Indirect Emissions (Other activities)
Import
Emissions due to the transportation of goods from suppliers to the Hong Kong and Aranjuez (Madrid) logistics centres.
Logistic
Emissions due to the transportation of goods from Logistics Centres to all directly operated stores and to the transportation of goods from online sales (LOGISTIC).
Export
Emissions due to the transportation of goods to franchise stores.
Ecommerce
Emissions due to the transportation of goods from online sales.
Trips
Employee business trips.
57,912 Tn CO2 eq

Data as of February 28, 2017.

Total greenhouse gas emissions

Emissions

Data as of February 28, 2017.

Distribution of greenhouse gas emissions

Emissions


Tn CO2 eq Kg CO2 eq / garment
Emissions from garment transportation (*) 15,207 0.18

Tn CO2 eq Kg CO2 eq / m2
Emissions from electricity consumption in stores (**) 32,833 89

Data as of February 28, 2017.

(*) 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.

Emission rates

Emissions

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07Environment Commitment

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Stores
Cortefiel

Cortefiel

Stores

Springfield

Springfield

Stores

WomanSecret

WomanSecret

Stores

Pedro del Hierro

Pedro del Hierro

Stores

Fifty Factory

Fifty Factory

Stores

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07Environment Commitment

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Shipping
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07Environment Commitment

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Packaging
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07Environment Commitment

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Products
11,755 Patterns analyzed
38 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).

Chemical incidents

Products

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08
Society Commitment
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08Society Commitment

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08Society Commitment

Watch video
Get Involved Contest
Total contribution 2005-2016: 1,187,206 Euros

Data as of February 28, 2017.

Evolution of the Involved Project from 2005 - 2016

Involved Project

1,187,206 Euros

Data as of February 28, 2017.

Distribution by area of actitivy 2005 - 2016

Involved Project

1,187,206 Euros

Data as of February 28, 2017.

Distribution by geographic area 2005 - 2016

Involved Project

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08Society Commitment

CHAIN CAMPAIGN BENEFICIARY PROJECT CONTRIBUTION (€)
Cortefiel Involved Project S.A.U.C.E. (Solidaridad, Ayuda y Unión Crean Esperanza) Program for the accompaniment of the disabled in north-west Cambodia 37,612
Pedro del Hierro Involved Project Fundación Pablo Horstmann Let children have health 29,252
Springfield Involved Project Asociación Norte Joven Solidarity lights 31,740
Women'secret Involved Project Asociación Española Contra el Cáncer RGive life 32,749
Grupo Cortefiel Employee Christmas Competition Tierra de Hombres Journey towards life 1,000
Grupo Cortefiel Telva Solidarity Awards 2016 Fundación Juan Felipe Gómez Escobar Support adolescent mothers in Cartagena (Colombia) 9,000
Grupo Cortefiel Campaign for Humanitarian Aid to International Missions Cáritas Parroquial Castrense Getafe Humanitarian program 17,230
Total 158.583

Data as of February 28, 2017.

Contributions to charity projects 2016

Summary of charity projects

CHAIN CONCEPT BENEFICIARY CONTRIBUTION (€)
Grupo Cortefiel Member Fee Fundación SERES 6,000
Grupo Cortefiel Partnership Fee Fundación Lealtad 4,000
Grupo Cortefiel Cátedra Cortefiel ISEM 30,000
Total 40,000

Data as of February 28, 2017.

Other contributions to social action in 2016

Summary of charity projects

NUMBER OF GARMENTS VALUE (€)
48,101 173,901

Data as of February 28, 2017.

Clothing donation 2016

Summary of charity projects

Total contribution 2008-2016: 1,837,775 Euros

Data as of February 28, 2017.

Summary of charity projects 2008 - 2016

Summary of charity projects

1,837,775 Euros

Data as of February 28, 2017.

Distribution by area of activity 2008 - 2016

Summary of charity projects

1,837,775 Euros

Data as of February 28, 2017.

Distribution by geographic area 2008 - 2016

Summary of charity projects

CHAIN CAMPAIGN BENEFICIARY PROJECT CONTRIBUTION (€)
Cortefiel Involved Project S.A.U.C.E. (Solidaridad, Ayuda y Unión Crean Esperanza) Program for the accompaniment of the disabled in north-west Cambodia 37,612
Pedro del Hierro Involved Project Fundación Pablo Horstmann Let children have health 29,252
Springfield Involved Project Asociación Norte Joven Solidarity lights 31,740
Women'secret Involved Project Asociación Española Contra el Cáncer RGive life 32,749
Grupo Cortefiel Employee Christmas Competition Tierra de Hombres Journey towards life 1,000
Grupo Cortefiel Telva Solidarity Awards 2016 Fundación Juan Felipe Gómez Escobar Support adolescent mothers in Cartagena (Colombia) 9,000
Grupo Cortefiel Campaign for Humanitarian Aid to International Missions Cáritas Parroquial Castrense Getafe Humanitarian program 17,230
Total 158.583
CHAIN CONCEPT BENEFICIARY CONTRIBUTION (€)
Grupo Cortefiel Member Fee Fundación SERES 6,000
Grupo Cortefiel Partnership Fee Fundación Lealtad 4,000
Grupo Cortefiel Cátedra Cortefiel ISEM 30,000
Total 40,000
NUMBER OF GARMENTS VALUE (€)
48,101 173,901
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08Society Commitment

Charity Projects 2016

158,583

Euros Invested

4

Solidarity Campaigns

7

Beneficiary Institutions

7

Projects Financed

Watch video
Solidaridad, Ayuda y Unión Crean Esperanza
37,612 €
Contribution
S.A.U.C.E. Solidaridad, Ayuda y Unión Crean Esperanza
Program for the accompaniment of the disabled in north-west Cambodia

The objective of this project is to cover the basic needs of families at risk of social exclusion with one or more disabled members and to encourage economic activities that support sustainable development. Therefore, this initiative promotes agricultural activities in three communities with people with disabilities (Prey Thom, Otagnea, and Rattanak Moduol); supporting a workshop for artisan sewing and manufacturing, as well as the reparation and construction of homes and wells.

Solidaridad, Ayuda y Unión Crean Esperanza Charity Projects 2016

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Fundación Pablo Horstmann
29,252 €
Contribution
FUNDACIÓN PABLO HORTSMANN
Let children have health

The Fundación Pablo Hortsmann began the pediatric clinic “Let children have health” in 2012 to offer free medical assistance to the infant and child population in the Meki area (Ethiopia). Since then, the clinic has gone from providing basic outpatient care to having a powerful re-nourishment unit, an observation room for the stabilization of acute patients, and a room for admitting severely malnourished patients, converting itself to a reference center for the entire region and already impacting the reduction of the infant mortality rate in the zone.

Fundación Pablo Horstmann Charity Projects 2016

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Asocicación Norte Jóven
31,740 €
Contribution
ASOCIACIÓN NORTE JÓVEN
Solidarity lights

This innovative 12-month project developed in the Community of Madrid pursues a double objective: to ensure that youth and adults improve their employability through training that uses real-life experience and service-learning (electricity, plumbing, or carpentry), and to help the elderly with precarious economic situations or at-risk populations to take advantage of the training as a free service to maintain their households.

Asocicación Norte Jóven Charity Projects 2016

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Asociación Española Contra el Cáncer
32,749 €
Contribution
ASOCIACIÓN ESPAÑOLA CONTRA EL CÁNCER
Give life

The main objective of this project is to reduce the emotional impact provoked by the aftermath of breast cancer, both for patients and their families, facilitating the necessary means to confront treatment in the best possible way after already dealing with hair loss or a mastectomy. This involves fundamental support for many families, especially those who already come from a lower socio-economic situation.

Asociación Española Contra el Cáncer Charity Projects 2016

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Tierra de Hombres
1,000 €
Contribution
TIERRA DE HOMBRES
Journey towards life

Established more than 20 years ago, the objective of this project is to bring underage children suffering from serious illnesses to Spain from countries in Africa with a low human development index to receive specialized medical and surgical care in hospitals in the country. All of this is made possible due to a large chain of solidarity in which centers, medical teams, volunteers, and host families collaborate.

Tierra de Hombres Charity Projects 2016

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Fundación Juan Felipe Gómez Escobar
9,000 €
Contribution
FUNDACIÓN JUAN FELIPE GÓMEZ ESCOBAR
Support adolescent mothers in Cartagena (Colombia)

This project looks to help improve the psychological, family, and socio-economic situation for mothers between 11 and 18 years old in this Columbian city, who live in extreme poverty and often suffer from malnutrition. Through a training program, the youth are trained as kitchen and hospitality technicians, and in logistics and beauty, so that they can generate their own income and break the cycle of social exclusion in which they’ve grown up.

Fundación Juan Felipe Gómez Escobar Charity Projects 2016

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Caritas Parroquial Castrense Getafe
17,230 €
Contribution
CÁRITAS PARROQUIAL CASTRENSE GETAFE
Humanitarian program

Through a collaboration agreement, Grupo Cortefiel has cooperated with Cáritas Parroquial Castrense Getafe on the project Campaña Ayuda Humanitaria a Misiones Internacionales that the organization carries out in Africa. In this context, two major initiatives have been supported: on one hand, the donation of clothing to meet the needs of disadvantaged populations in Dakar and Gabon, and on the other hand, the donation of a large batch of Springfield sunglasses for agencies and people in need from populations in Djibouti, Gabon, Mali, Mauritania, and Senegal.

Caritas Parroquial Castrense Getafe Charity Projects 2016

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08Society Commitment

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Additional Information
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09Additional Information

Scope of the report

For the past ten years, Grupo Cortefiel has published its commitments regarding sustainability. Once more, with the objective of reaching a large audience, the company has utilized audiovisual and electronic tools without forgetting to guarantee the accuracy and transparency of information.

The content included in this report was developed following the guidelines and principles established in the Global Reporting Initiative’s Sustainability Report Guidelines, version G.4.

The characteristics of the organization have been taken into consideration, as well as the expectations of shareholders, who demonstrate their impressions through the various mechanisms described in this report.

This Sustainability Report 2016 incorporates all of Grupo Cortefiel’s activities, both for different brands and structured businesses, that are managed by corporate. In case of any content limitations, more details are provided either in the corresponding section of the report or the GRI index, adhering to the commitment to continue working on internal data management to provide more complete information.

This report covers the entire fiscal year 2016/17, which spans from March 1, 2016 to February 28, 2017.

Following the Group’s commitment to annually update results, this is the eleventh Sustainability Report that complies with GRI standards. As in previous years, it was published in an online audiovisual format, meaning there is not a written version of all content.

The basic criteria followed to present the information are:

  • All data before February 28th, 2017 is present unless otherwise stated.
  • All information and data obtained from different internal management systems from Grupo Cortefiel have been provided by those responsible for different fields.
  • The information is not limited exclusively to quantitative indicators, but rather is complimented by qualitative information to reflect a balance suited to sustainability.
  • The video footage is real, and it provides a deeper understanding of the content while representing the company as it is. It was recorded at headquarters, department stores, shops, and Grupo Cortefiel suppliers in China, Turkey, and Morocco.
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09Additional Information

Materiality

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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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09Additional Information

External Verification

KPMG Asesores S.L. has conducted an independent ISAE 3000 assurance review of certain indicators included in Grupo Cortefiel's 2016 Audiovisual Sustainability Report, considering the scope and conclusions described in the Independent Review Report that is available for stakeholders in the following link.

Grupo Cortefiel is responsible for the selection, preparation, maintenance and presentation of the information contained in the 2016 Audiovisual Sustainability Report, and ensuring that the information within KPMG assurance engagement corresponds to the one reflected on the Sustainability Report downloaded at the issuance date of the Independent Review Report.

The responsibility of KPMG has been to carry out a limited assurance review on the preparation and presentation of such information and to express an opinion based on the work performed. The scope of the reviewed information is detailed in the section "Global Reporting Initiative" of this Report, and is marked with the symbol in Grupo Cortefiel's 2016 Audiovisual Sustainability Report. In case of discrepancy between the scope or content of the information subject to review, the version published at the issuance date of the KPMG Independent Review Report shall prevail.

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09Additional Information

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 2016, 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 2016, no significant grievances about environmental issues.

CATEGORY: SOCIAL

LABOR PRACTICES AND DECENT WORK

HUMAN RIGHTS

INVESTMENTG4-DMA
G4-HR2
In 2016, 2.121 people have been trained in its implementation of the Code of Conduct.
NON-DISCRIMINATIONG4-DMA
G4-HR3
In 2016, 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 2016, 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 2016 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.

SOCIETY

LOCAL COMMUNITIESG4-DMA
ANTI-CORRUPTIONG4-DMA
G4-SO3
XX% of the business, representing XX% of sales, has been analyzed during 2016. 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 2,121 people during 2016.
G4-SO5
XX internal audit investigations have been elaborated in 2016 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 2016, no legal actions for monopoly practices or anticompetitive behavior.
COMPLIANCEG4-DMA
G4-SO8
In 2016, 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 2016, no grievances about impacts on society.

PRODUCT RESPONSIBILITY

CUSTOMER HEALTH AND SAFETYG4-DMA
G4-PR2
In 2016, no significant incidents concerning health and safety impact on products.
PRODUCT AND SERVICE LABELINGG4-DMA
G4-PR4
In 2016, no significant incidents of non compliance concerning product information and labelling.
MARKETING COMMUNICATIONSG4-DMA
G4-PR6
Not applicable.
G4-PR7
In 2016, no significant incidents of non compliance concerning the supply and use of products or services.
CUSTOMER PRIVACYG4-DMA
G4-PR8
In 2016, no significant incidents for non compliance concerning customer privacy or losses of customer data.
COMPLIANCEG4-DMA
G4-PR9
In 2016, 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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09Additional Information

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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09Additional Information

Contact

This 2016 audiovisual Sustainability Report is available on-line in both Spanish and English, in the Grupo Cortefiel's official website. www.grupocortefiel.com.


Área Corporativa.

Avenida de Llano castellano Nº 51.

28034, Madrid.

España.


For any questions or additional information, please contact:

prensa@grupocortefiel.com

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