A kind of curse fell on the Spanish fashion industry years ago and only Inditex was saved . Blanco broke at the end of 2016 after half a century wearing women and men. Then Caramelo did it; two brands that reaped great success in the midst of the economic crisis, Custo and Desigual , are reeling today and others with an important international presence such as Cortefiel, Mango or Adolfo Domínguez are now recovering from their particular bump.
Except for the giant owner of Zara , Spanish textile has been on the roller coaster for a few years. The market is increasingly competitive, brands find it difficult to find their site and the customer is more demanding. This in a world in which Amazon stomps and in which online sales are somehow competing with the physical stores themselves.
«The sector is experiencing a moment of transformation and the recipes of a lifetime no longer work. You have to do different things to get different results. Companies that do not take steps in this direction will have survival problems, ”said Toni Ruiz, Mango CEO, in a recent interview with this newspaper.
There are three brands with a lot of weight in our industry that are managing to overcome the bump thanks to the fact that, in their day, they placed new executives with experience in the house in command and began to make the necessary changes to overcome.
Adolfo Domínguez, with Adriana Domínguez at the helm, has taken the mark of its deepest crisis at a time when some experts in the sector even pointed to a possible sale as a solution. In Cortefiel, Jaume Miquel, who took the reins of the group (now Tendam) in 2016, has managed to redirect the brand when it tried to connect with the millennial public and, as a consequence, moved away from its regular client.
In Mango it is Toni Ruiz, today general manager, in charge of managing the company, which entered in red numbers in 2016 when embarking on an ambitious store restructuring project.
«Leadership in a brand is essential to carry out the necessary changes to compete. You can have a good strategic plan but a bad management that brings it to the surface. In all three cases, these are managers with their feet on the ground, ”says an expert who has been working in the fashion industry for decades.
Textile sales have followed a disparate evolution in recent years. Last year, more than 2% fell, partly due to the changing weather, which did not lead to visits to the store in summer or winter. The store is precisely one of the challenges of the Spanish industry: How to make sense of it when online commerce grows stronger and stronger?
IDENTITY
ADRIANA DOMÍNGUEZ
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CEO of Adolfo Domínguez
The businesswoman (Orense, 1976) is the eldest daughter of designer Adolfo Domínguez. He took the reins of the group in 2017 although he had previously been general director advisor and director of the brand's perfume area.
Adolfo Domínguez faced the crisis almost at once, when he was going through his moment of glory. «The strategic decisions, when they are taken, are right, but then with the perspective it looks differently. When the crisis began we came from making a strategic decision that was the expansion: with stores in not-so-central locations, thinking that the brand was enough claim, ”says Antonio Puente, general director of Adolfo Dominguez , to EL MUNDO.
This was the trigger for the company's crisis. Adolfo Domínguez, who had been an emblem in the 90s, went into losses and went through hard years. Experts talked about a brand problem: he had disconnected from his client, they had lost their identity. "In the sector it is important to know who you are, and not play to be who you are not," says Puente.
Adriana Domínguez arrived at the company in 2016. «Then we started to make concrete decisions: to unify the brands, focus on the profitability of the stores and look for efficiencies», says the Spanish brand executive: «Their role has been fundamental, it has been who has led that change from a strategic point of view and is the guarantor of the brand's values ».
THE MANGO BET
TONI RUIZ
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Mango General Manager
Before being appointed Managing Director by IsakAndic, the owner of Mango, Toni Ruiz was the financial director of the brand since 2015. Before joining Mango, the manager was working for many years at Leroy Merlin.
Mango's problem has not been identity, but his crisis comes from having anticipated what they knew the market was going to ask for. In 2016 they decided to invest money in modernizing their stores and this investment, together with a problem with the collection, led them to losses for the first time in their history.
Toni Ruiz acknowledges that if they had not made these changes in stores, Mango would surely have made a profit all these years, but the company "would not be prepared for the new stage" of the business of commerce. "Now we are much more prepared than we were a few years ago," he says.
Its management is paying off and although the chain has not yet managed to return to profits [lost 35 million in 2018], its sales grow [1.2% last year] and its ebitda is already positive: that is, the business of selling clothes is not deficit but profitable. Mango is, after Zara, the second most fashionable fashion company in our country, according to EAE Business School.
FROM CORTEFIEL TO TENDAM
Jaume Miquel
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President of Tendam
The manager (Lleida, 1963) is on the crest of the wave. For 10 years he led Women'secret. It was in the years when the brand grew the most. He was also director of Cortefiel and Pedro del Hierro. Since 2016 he is CEO.
The year 2016 was also key for the Cortefiel group, owner of the brand, Springfield, Women'secret and Pedro del Hierro and which a year ago was renamed Tendam. That year Jaume Miquel was elected CEO, after leading the group's fastest growing chain for a decade: Women'secret. To the executive the command fell at a delicate moment for the company: the business was deficient and the debt did not stop growing.
In these years, Miquel has led a strategic plan to restore health to the chain. He has turned the business around. Last year Tendam returned to profit after four years in red numbers and has reduced the debt by almost half. It closed 2017 (its last full year), with a net profit of 98 million, compared to losses of 24 million a year ago.
Last year they changed the name of the group, which is no longer GrupoCortefiel but Tendam, as a symbolic act to leave behind those years of uncertainty.
From the unbeatable Inditex to the Desigual crisis
Spanish brands and chains have followed different paths. Inditex, the world fashion empire, has also been affected by the turbulence of the sector. Last year their sales suffered (they grew, but not as much as in previous years) precisely because of the impact of the climate.
Although the challenge of the chain owning Zara is in the digital transformation: online sales already represent 20% and the goal is that next year any person anywhere in the world can buy online in any of the brands of the chain. This is a major challenge because it means raising Inditex to a planetary level.
The integrated stock is also part of its digital strategy. Rationing the stock (that in stores there are no more clothes than will be sold and that at the end of the season there is the minimum possible surplus) is one of the obsessions of textile companies.
Inditex intends that in 2020 orders can be sent from stores, and not only from logistics warehouses as before. This is faster, because the customer will be supplied with the garment he has ordered from the nearest store where it is available.
According to an expert in the sector, the business environment "is so competitive and has so many challenges that many medium or more modest brands have not been able to adapt." The level of investment required by these changes is not available to anyone.
Desigual and Custo , for example, do not have a good time. Desigual was one of the brands that grew most during the crisis, but now "has failed to adapt its look, which is very specific, to the current public," says a specialist very close to the firm. Their stores have also been a bit dated.
Custo, a brand that became very fashionable a decade ago, has also seen its sales fall. In 2016, 9% did so, which forced them to start a restructuring process at the firm.
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