El Corte Inglés overcomes with Marta Álvarez shake up
The group presents a strategic plan to recover the time loss after putting an end to an internal fight and controlling its debts.
El Corte Inglés makes restart move. With the directors’ board in the same page as the presidency, the Spanish department store giant, third in the world by revenue, boosts a new strategy to recover lost time and reach its competitors pace.
The company lived a bumpy road for the past 12 months after Dimas Gimeno left his position as president of the group. Last Sunday, in the last shareholders meeting the new president presented for the first time the guidelines of the new growth strategy of the company that the group has been implementing during the last year.
While El Corte Inglés was putting a stop of two years of internal fights for leadership and advanced in a complex plan to reduce its debts, Sears sank in the United States and Marks&Spencer announced the closure of more than one hundred stores in the United Kingdom. One year after the restructuration of the former helm, the company activated projects to keep the pace and connect with its new consumers.
During the last year, El Corte Inglés started projects part of a strategic plan presented in the last shareholders meeting
Marta and Cristina Álvarez not only turned around the hereditary tradition of the group but must also face a much deeper transformation: digitalization. After one year, the new board of directors is aligned with a cohesive project.
During the last couple of months, the company reorganized its executive team, restructured its debt and set the roads for its path towards digitalization. In this way, the team of Marta Álvarez, Jesús Nuño de la Rosa and Víctor del Pozo, gain strength.
The debt is still one of the things that sets the group back. In 2018, the company managed to reduce it 467 million euros, arriving at 3.3 billion euros. Reducing the debt was possible thanks to some actions like selling 96 real state assets or the business Optica2000.
Now that the disagreements in the helm are solved, the group needs to face its digital transformation and debt
On the other hand, El Corte Inglés did for the first time a bond issue to refinance part of a syndicated credit. The operation arrived at 800 million euros and has added the group to the Dublin stock exchange, forcing it to keep a more transparent policy that it had up until now.
Finally, the biggest boost of the group was the reorganization of its portfolio. One of the fist decisions made by the directors’ board was to create a canon for the brands to achieve. With this measure, the brand ensured the improvement of its margins.
In this way, the company rearranged also its womenswear portfolio, focusing in only one: Woman. This reorganization ended with the closure of brands like Antea, Zendra and Yera.
In twelve months, the company rearranged its portfolio, has sealed an alliance with Alibaba, has started its digitalization and has created a new store concept
The group also took its first steps in omnichannel, achieving less that two-hour delivery in Spain using its capability in the territory and sealed a pact with the Chinese giant Alibaba to speed its internationalization and digitalization. In this pact El Corte Inglés entered the Chinese platform through Tmall and Aliexpress. On the other hand, Alibaba provided the group with technology to speed its online presence.
From this pact in June, El Corte Inglés started the commercialization of seven of its fashion brands (Easy Wear, Fórmula Joven, Green Coast, Free Style, Boomerang, Mountain Pro and Unit), through all the platforms of Aliexpress.
The Spanish giant also started to try new business models. The first one is one of the stores the group owns in the Spanish capital, Madrid. The company will invest one hundred euros in its remodelling.
“We are closer to earning the future”, stated the new president in the last shareholders board. And after two years of internal fight and one year of transition, the hardest task, to consolidate a new leadership is fixed. Now the road is not easier, the group has the challenge of updating a retail concept that for now is being questioned.
Validation policy for comments:
MDS does not perform prior verification for the publication of comments. However, to prevent anonymous comments from affecting the rights of third parties without the ability to reply, all comments require a valid email address, which won’t be visible or shared.
Enter your name and email address to be able to comment on this news: once you click on the link you will find within your verification email, your comment will be published.