El Corte Ingles records historical losses 3000 million euros after deteriorating 2,500 due to the impact of the pandemic - El Corte Inglés recorded a net loss of 2,945 million euros in 2020, in what is the first negative result in its history, as clear evidence of the impact of the pandemic on the group's accounts, according to the company itself.

This decline is explained by provisions and deterioration on some of its assets worth 2,500 million euros, and that have their reason in the outbreak of the pandemic. Without these extraordinary effects the loss would be 445 million.

The group of warehouses has seen its revenues fall by 31%, to 10,432 million euros. The retail area has fallen by 19% compared to the previous year, in line with the lower income derived from shopping tourism.

The lack of mobility and the absence of tourists has been reflected in the sales of Viajes El Corte Inglés have fallen by 89%. However, El Corte Inglés Seguros has been able to maintain its sales volume in this turbulent 2020.

The company's ebitda was positive and stood at 142 million euros, driven, in part, by the group's efforts to promote digitalization and omnichannel, as well as to develop new businesses.

Corte Ingles records historical losses 3000 million euros

In addition, the group has strengthened its liquidity position, which at year-end stood at 3,549 million euros. On the other hand, the debt has increased by 560 million euros, to reach 3,811 million.

The retail business has fallen so much by 19% compared to the previous year, in line with the lower income derived from shopping tourism. This moderate fall, point from the group, would have managed to alleviate the effects of the pandemic through a commitment to the omnichannel model and digitalization.

This digitization process has meant that the weight of online sales stands at 17.3% of the total volume of retail business, which represents an increase of 132% over the previous year.

Corte Ingles records historical losses 3000 million euros

As an advance of the first quarter of 2021, the group explains that business area sales are meeting expectations, reaching levels close to those of 2019, despite the persistent effects of the pandemic.

The pandemic has unleashed the perfect storm for the group: mobility restrictions and a boom in online commerce. All these factors made Marta Álvarez present the first file of employment regulation (ERE) in its history .

After several negotiations with the unions, the measure will affect 3,292 workers, according to union sources. The company will finally compensate employees involved with 33 days for a year worked with a maximum of 24 monthly payments, regardless of whether they are forced or voluntary departures.

Also, during the negotiation tables, the group forced the unions to include a clause in the agreement: once the adjustment was approved, it could move the staff it needed to the destination it wanted in exchange for a one-time payment of 5,000 euros.

Corte Ingles records historical losses 3000 million euros: There have been many attempts by the group to weather the crises caused by COVID-19. Last April, and as part of the group's mission to diversify the business, the company entered the world of energy and began to market photovoltaic panels for domestic use.

Another example of this earlier this, is the agreement by which the company and MásMóvil were allied to launch a virtual mobile operator with the name of Sweno and offer fiber and mobile rates.

Other steps would have been focused on optimizing the payment method. In March the group had reached an agreement with the payments giant Mastercard to launch its first universal card. Soon after, it also registered the word "Bitcor," in what could be the group's first step into the world of cryptocurrencies.

Likewise, the company decided to put up for sale real estate assets for 3,000 million euros. In this way, the board of directors of El Corte Inglés would have drawn up a strategic plan to adapt its commercial network, its staff and its assets to the new economic reality caused by COVID-19.

Corte Ingles records historical losses 3000 million euros

More news:

Mango advances in its diversification plan: it creates a corporate structure to channel the sales of its household division and capitalize on the' boom ' of the sector

At the beginning of the year, Mango was launching into the world of the home. Now, and in view of the good performance of the sector, the Catalan company has created a corporate structure that will channel the sales of this division as proof of the diversification exercise that the textile group is assuming.

In this way, the fashion group will centralize all the operations of its new division under the umbrella of DenimLab Concept, as the Information collects.

The company chaired by Isak Andic would have carried out this operation motivated by the good pace of sales that have registered household products during the COVID-19 pandemic, and that have found in the online channel their best workhorse.

Proof of how important the impulse of e-commerce is in this new adventure lies in the fact that at the head of this division is the online store director, Elena Carasso. However, it will be Margarita Salvans, the head of Finance, who will have full powers in this company.

At the corporate level, the director and sole shareholder will continue to be the parent company of Mango MNG Holding, on which all the bunch of companies that the company has been developing as it has grown its business depends.

In January, Mango announced its foray into the world of the home and explained at that time that the collection would be on sale exclusively on the online channel, both in Spain and in other European countries where it is present with the digital store.

At the end of April, the collection began to be available on the digital channel and the company indicated that it would be from the autumn and winter campaign of 2021 when the offer would expand products for the kitchen and dining room.

Toni Ruiz, CEO of Mango, in this same line explained that the launch of this new division responded to a "demand" by customers, who claimed the same "comfort and style" to dress that to decorate their home.

If the good pace of the household division continues, it would not be surprising if the company were to expand its offer to other geographical points. According to the group's latest report, there are 81 countries that have a digital channel out of a total of 112.

This maturity of e-commerce is best explained in that Mango was a pioneer in entering it: it had its first website in 1995 and 5 years later it would launch to sell. The latest results of the group reflected the robustness of the digital channel: while there was a reduction in sales of 22%, to 1,842 million euros, online sales rebounded by 36%, to assume 766 million euros in turnover.

But beyond these results, this digital maneuver is not new in the textile world. Inditex was one of the latest giants to launch into the online world, but when it did so in 2007 it was with its home division and not with its well-known Zara, which would not do the same until 2010.