El Corte Ingles is one of Spain's largest private companies, but was finally unseated as the country's biggest retailer first in 2012 by Zara parent Inditex and then by supermarket giant Mercadona. It is principally a department store operator, selling a wide range of fashion, soft furnishings, household goods and appliances through its 90 or so domestic stores. Sister fashion retailer Sfera is positioned as a direct rival to the Inditex portfolio. However, the group has extended its footprint into numerous other sectors ranging from supermarkets (Hipercor and Supercor) and DIY (Bricor) to insurance (Seguros) and travel services (Viajes El Corte Ingles). Several smaller businesses - such as computer manufacturer Informatica and optical retailer Optica 2000 - have been divested and buyers are being sought for others, such as the travel agency business. El Corte Ingles has been described as probably the single greatest influence on Spanish culture after Real Madrid football club. Almost a quarter of the population own an El Corte Ingles storecard, and it attracts around 2m customers a day. Yet despite its substantial operations in its domestic market, the group has only a minimal presence beyond the Iberian peninsula. As a result, financial performance dipped significantly in the late 2000s as a result of Spain's economic problems, with revenues slipping steadily between 2007 and 2013. There has been steady recovery since then, though inevitably the Covid pandemic has significantly damaged performance during 2020. Revenues for 2019 were €15.3bn with net profit of €310m. The business was established by Ramon Areces, who acquired a small Madrid tailoring business owned by his uncle (El Corte Ingles translates as "The English Cut") in the 1930s and built it into Spain's biggest retailer. His nephew Isidoro Alvarez was the architect of the group's continuing expansion in the latter half of the century and was chairman and controlling shareholder of El Corte Ingles until his death in 2014. Alvarez' own nephew Dimas Gimeno Alvarez was appointed as chief executive in 2013, but was eventually replaced in 2017 by former general manager Jesus Nuno de la Rosa. He in turn was succeeded in 2019 by Victor del Pozo. The family of Isidoro Alvarez control most of the equity in the business, but this has prompted a bitter court battle. Prior to his death, Alvarez gifted a controlling stake in the business to the two adult daughters of his mistress. The eldest, Marta Alvarez Guil, is now chair of El Corte Ingles. Other family members led by former CEO Dimas Alvarez have attempted to challenge that inheritance, so far without success. A Qatari investment fund acquired a 10% stake in El Corte Ingles in 2015 for €1bn and is thought to be pressing the group to issue an IPO in 2021.
Capsule checked 20th November 2020
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Adbrands Weekly Update 18th Sep 2014: Two of Spain's most respected business leaders died this month, both aged 79. Isidoro Alvarez was responsible for establishing his uncle's department store group El Corte Ingles as the country's single most important retailer and its presiding cultural force over the second half of the 20th century (though its influence has been curbed since 2000 by more internationally focused rival Inditex). He remained chairman and controlling shareholder until his death this week. His successor as chairman has yet to be named. That followed the death a week earlier of Santander chairman Emilio Botin, who transformed a small regional lender into one of the world's biggest banks. He is succeeded as chairman by his daughter Ana Patricia Botin.
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