Spanish retail giant El Corte Ingles hit by economic crisis
One of Europe’s biggest retailers and a barometer of the Spanish economy, El Corte Ingles, reported a 3.9 percent drop in its 2011 turnover, to 15.8 billion euros, still amounts to 1.6 percent of Spanish GDP and is higher than the 13.8 billion euros which the country’s largest stock market-listed retailer, Zara owner Inditex, made in 2011.
Sales at the 83 department stores fell 4.2 percent and those at its Sfera unit – a clothing store that competes with Zara (Inditex Group) – fell 8.5 percent, though cost controls helped the business make a net profit of 1.9 million euros.
El Corte Ingles is also trying to target high spenders, a potentially risky strategy because it could end up pleasing no one. It has invested in renovating often dated buildings and is using the high number of visitors to its stores to attract luxury labels to set up “corners” within them. With 1.5 million visitors daily and no other national competitor, the brand is the first port of call for labels wanting to dip a toe in the Spanish market.
At one Madrid store it opened a small wing of luxury shops such as Bulgari, Prada and Cartier, as well as a section of gourmet cafes and food outlets. Besides Madrid, El Corte Ingles Barcelona also features several international luxury brands, with shop in shop concept (Valentino, Prada, Louis Vuitton).