El Corte Inglés: Fitch increases its rating to BB+ because of its business strategy
The qualification agency gave a good valuation to the business strategy of the Spanish department stores giant, the reduction of its debt, the financial flexibility and the operational of real states business.
Fitch ranks El Corte Inglés higher. The qualification agency gave a good valuation to the business strategy of the Spanish department store group, third in the world by revenue, from BB to BB+, with a positive perspective.
This rating positions the company still in a questionable position but also positions it in the doors of satisfactory quality, that will take the group to the next level, BBB-. This was the qualification that Standard&Poor’s gave its bonus last June.
According to Fitch, the improvement of its valuation is a consequence of the right business strategy, a positive reduction of the debt and a financial flexibility.
Fitch’s qualification for El Corte Inglés is still lower than Macy’s, Nordstrom and Marks&Spencer
Fitch also states in its report that El Corte Inglés is in the line to get the BBB- qualification in less than a year and a half, as long as it continues to reduce its debt. The improvement in the rate will allow the group to continue its diversification and cheapening its financial sources, according to Europa Press.
However, the agency points that the Spanish department stores group is still underneath other department store groups due to its low profitability and its high debt. Macy’s has BBB, Nordstrom BBB+ and Marks&Spencer, despite being in the middle of a restructuration, has a BBB-.
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