The vast empire owned by El Corte Inglés for more than 80 years is languishing. The group has overcome previous crises with good marks, but the coronavirus crisis has put a company in trouble that sees its business model running out. The digital world, on the one hand, and the devaluation of one of its great assets (real estate), on the other, have left the firm touched. Hence, it has accelerated in its digitization. And also the diversification of its business to seek new ways to cushion the decline of its traditional activity: the sale of all kinds of items in its department stores.
In 2020, with the pandemic hitting hard, El Corte Inglés has redoubled its bet. “The second axis on which our plan for the coming years is based is diversification. We are working on numerous projects, ”says the letter from President Marta Álvarez included in the non-financial report for last year, in which she reaped losses of 2,945 million euros. One of the key elements in this strategy is the Sicor Group, which was born after the acquisition of the security company Mega2, in July 2020. “It encompasses various activities and its objective is to offer both private, corporate and institutional clients, a series of services ranging from security and alarms for the home, to cleaning, maintenance or logistics, among many others ”, he explains in the non-financial Report.
Sicor is made up of seven companies that will serve El Corte Inglés and other companies. It has security, comprehensive support services for individuals and companies, cleaning and maintenance, logistics, a temporary work firm, a special center to promote the employment of people with disabilities and supplies of protective equipment. Company sources explain that the group is already in the final phase of creation and approval.
In terms of security, the firm will have physical (guards, personal protection and bodyguards, canine units) and electronic security. And alarms for the home will also be marketed. For its part, in comprehensive services it will have the services of hostesses, janitors and drivers, among others, as well as the option of outsourcing production processes. It will also provide cleaning and maintenance services. And in supplies, it will sell uniform products and personal protective equipment to other companies.
On the logistics side, you will create an independent business to take advantage of the momentum of e-commerce on a global scale and get more out of your extensive infrastructure. “The experience in the field of logistics to supply our establishments, develop our commercial activity and reach our customers directly, has allowed us to lay the foundations to open this business to third parties and begin to manage their entire logistics system, both internationally. as national, regional or local ”, says El Corte Inglés in the document. And in terms of employment, it will bet heavily with the temporary work agency for third-party companies to perform certain services at fairs, congresses, concerts, exhibitions … In other words, it will become an important player in the market for temporary work companies.
Mobile operator and energy
The group has already launched other projects in the past year. Among them is the virtual mobile and fiber operator, announced in March: “It will allow us to make available to our clients a complete offer of convergent fiber and mobile telecommunications services under the best coverage and quality conditions under the Sweno brand”, explains the Non-Financial Report.
This entry as a mobile operator is not the only new sector in which it has recently entered. The firm has also opted for the electricity market, in which it will operate under the same commercial name as in telephony: “We have started the procedures and we already have the relevant permits to become an energy marketer. This project, which will be launched on the market in 2021, will be developed through our company Telecor and will also be marketed under the Sweno banner ”, adds the firm.
The financial world is another in which El Corte Inglés wants to expand its presence, relying on previous experience in insurance. “Possible agreements with other specialized entities open the doors for us to develop and offer clients products related to the management of investment funds, wealth managers, among others,” the company explains.
The department store firm’s bid for more diversification is largely justified by past successes. The two best examples are Viajes El Corte Inglés and El Corte Inglés Seguros. “They were born to provide internal service and began to offer themselves abroad until they became leaders in their respective sectors,” says the firm. In addition, in travel the company wants to expand its presence despite the covid and has launched a plan to “create a tourism group that is the leader of travel agencies in Spanish-speaking countries” through the merger with Logitravel . Between them, they will create a giant with more than 500 points of sale in the world that will be the leader in Spain and will be able to compete with large multinationals such as TUI.
Another of the key factors in the diversification of the group is the Real Estate leg, a division for which it opted in 2019. “El Corte Inglés Real Estate is the business unit of the Group specialized in the promotion, construction and management of real estate assets . It integrates all the areas of the group related to the real estate activity and has professionals specialized in construction, architecture, engineering, projects and works, interior design and decoration, among others ”, says the non-financial report. The promotion of this activity seems capital, since it is one of the companies with the largest real estate assets in Spain: it manages 12 million square meters, of which 11 million are owned, and more than 1,400 properties owned or rented.
“During the 2020 financial year, the business unit dedicated to the active management of office buildings that are owned by the group has been strengthened, either for its own use or for leasing to third parties, with the aim of optimizing use of these assets and maximize their income-generating capacity ”, explains the company.