The changes in the leadership of El Corte Inglés, with the departure of its CEO, Víctor del Pozo, leave the transformation of the department store group in the hands of a new executive committee led by the president, Marta Álvarez, and the two new directors generals.

Divest in non-strategic real estate to reduce debt, double online sales until they account for 30% of turnover and open new lines of business are some of the great challenges of the new team.

These were already marked in

the strategic plan approved last July

and which, curiously, was drawn up by the outgoing CEO.

In this roadmap, the group sets five-year objectives (2021-2026), within a complicated macroeconomic context marked by new uncertainties such as inflation or the rise in energy and raw materials, but without the restrictions linked to the pandemic and that weighed down the business so much.

One of the objectives is to straighten out the company's accounts, which recorded historic losses in 2020 due to the impact of the health crisis.

The department store group closed the year with red numbers of 2,945 million, as the business was severely damaged by the restrictions and successive closures.

Result

The company wants to improve its gross operating profit (Ebitda) by 40% by 2026 compared to before the pandemic, up to 1,700 million, and

double the net profit it obtains in 2021

.

The end of restrictions on trade and the return of part of international tourism, which has a lot of weight in its business, has already allowed revenues to improve by 25% in the first half.

The company has just closed the fiscal year corresponding to 2021 and has yet to publish the results.

Another of the challenges facing the new executive team is to reduce its debt by 60%, which amounted to more than 3,800 million in 2020, through the divestment of non-strategic real estate assets.

The group wants to sell land, logistics space, offices or commercial premises, also taking advantage of the investor appetite in the sector.

It has a portfolio of assets valued at more than 16,000 million (including department stores and other spaces) and has put thirty of them up for sale.

Precisely a few days ago the group announced an agreement with the banks for the refinancing of 2,600 million debt, which allows it to extend the repayment terms until March 2027.

Digitization

Along with Marta Álvarez, who presides over the new management structure, those responsible for executing the other two major axes of change will be the new CEOs:

José María Folache and Santiago Brau

.

The first, in charge of the retail business, will be in charge of promoting digitization, key in future plans.

The company has set itself the goal of doubling online sales until it represents 30% of turnover in four years.

At the end of the year it accounted for 15% of the total.

It also wants to diversify the businesses, and Santiago Bau will be in charge of this, taking over the corporate area and new businesses.

El Corte Inglés wants to go from being a group of department stores to becoming an "ecosystem of services and businesses", where new activities will play a relevant role and will allow new sources of income to be obtained.

At the moment, it has already entered the logistics business (El Corte Inglés Logistics), the mobile telephony business (Sweno) and energy marketer, and also the security and alarms business, with Sicor, among others.

Added to this are two large operations in recent months, such as the purchase of the Sánchez Romero chain in July 2021 to reinforce the food part, and months later the entry of Mutua Madrileña into its capital, with 8%. a Bolsa is also in the company's plans for the coming years.

With the relief of Víctor del Pozo

there are already several changes in the leadership in the last five years.

Only in this time the company has already had three presidents (Dimas Gimeno, Jesús Nuño de la Rosa and Marta Álvarez), two CEOs who have left (Jesús Nuño de la Rosa and Del Pozo) and now a new commission in which Marta Álvarez gains executive power and will be supported by the two general directors who will be in charge of executing this transformation process, but without a place on the board of directors.

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