The burden that the coronavirus crisis has meant for the entire retail sector has also reached a giant like The English Court. The Group chaired by Marta Álvarez said goodbye to the year of the pandemic with historic losses of 2,945 million euros. A period marked by the forced closure of establishments during the worst months of the crisis, in addition to the subsequent restrictions on mobility that have affected trade so much.
In fact, most of the group’s losses correspond to the provisions made, amounting to 2,500 million euros, which have been used to cover impairments of fixed assets, inventories and tax credits, as detailed by the company. Without that factor, net losses would be limited to € 445 million.
The red numbers reflect the very tough year that the sector as a whole has gone through. In the case of El Corte Inglés, whose fiscal year began on March 1, 2020, coinciding with the hardest months of the crisis, the fall in tourism has been key in closing its results. From the company they point out that it is precisely this segment that represents between 10% and 15% of their usual turnover. And with the total loss of travelers, the negative impact is irremediable.
Precisely for this reason, drop in sales was 31% in the period, until the 10,432 million euros. Among the most affected segments was, in this sense, the travel agency business, which saw its sales fall by 89%. The retail segment, which includes department stores and Sfera, withstood the impact of the crisis somewhat better with a 19% drop in sales.
Improve online business
The promotion of the Day Delivery, Store Pickup or Clickc & Car services, as well as the use of the stores themselves as logistics platforms for the preparation and dispatch of orders, have been decisive in the evolution of the business.
The digitization process undertaken by the group has achieved that online sales now represent 17.3% of the total volume of the retail business, which represents an increase of 132% compared to the previous year.
Despite the difficulties, El Corte Inglés managed to dismiss the financial year (from March 2020 to February 28, 2021) with a positive Ebitda (results before interest, taxes, depreciation and amortization) of 142 million euros. And the figures for the first quarter point to a quick recovery. In fact, from the group they point out that “retail sales are meeting expectations, reaching levels close to those of 2019, despite the persistent effects of the pandemic.”
On the other hand, it has strengthened its liquidity position which, at the end of the year, stood at 3,549 million euros, allowing it to face all the company’s commitments with consistency and firmness. The rise in debt during the year of the pandemic has also been limited, from 560 million euros, to 3,811 million.