The English Court has a serious intention of creating an entire emporium of Spanish fashion, which reaches a turnover of at least 4,000 million euros per year. This is how the chain of stores has in its sights especially the Tendam group (former Cortefiel group), the conglomerate behind brands like Cortefiel, Springfield or Women’secret.
According to the portal Cotizaliathe Spanish giant has offered €800 million to stay with the brands of the Tendam group, a figure that would be added to the 445 million euros of debt that the company carries.
In total, the Spanish group’s offer would reach €1.25 billionan amount that does not cover the expectations of the 2 venture capital funds, CVC and PAI Partners. These firms, along with Permira, were the first to invest in Cortefiel in 2006, disbursing some 1,400 million euros for the chain, also including the Springfield and Women’secret brands.
Ten years after that purchase, the 3 funds sought to recapitalize the company, which was facing a million-dollar debt that was impossible to pay and that had caused the company’s valuation to drop to just one euro. After two years of improvements in management and after the company’s IPO, the funds tried to sell it, but the operation was frustrated by the high expectations surrounding its valuation.
Now, having overcome the impact of the COVID-19 pandemic, CVC and PAI Partners continue with the idea of divesting from the Group due to the ups and downs and an unexpected increase in costs that predict an uncertain future for finances.
El Corte Inglés and eCommerce
For some time now, El Corte Inglés has been showing interest in becoming a true giant of online and offline commerce in Spain, with the constant improvement of services and infrastructure and the development of an updated omnichannel strategy.
Despite continuing to be a heavyweight in Spanish retail, in recent years the company has focused its efforts on adapting to the new parameters dictated by the world of eCommerce in order to compete with the new marketplace giants, mainly amazon.
For more than 20 years, the chain has been involved in e-commerce projects focused on different themes, such as The Online Gourmet Club (2001), one digital photo development store In collaboration with Kodak (2005); primeriti, a private sales club with fashion, accessories, cosmetics, technology and home brands (2011); and services Click&Car (the purchase is made in the online supermarket and is collected later with the car in the parking lot of the chosen shopping center) and Click&Collect (purchases in more than 200 El Corte Inglés or Supercor centers include purchases of fashion, home, beauty, cosmetics, etc.) launched in 2014, among other actions.
In 2020, the worst year of the pandemic, online sales of El Corte Inglés increased by 132%, an achievement that was obtained thanks to the 1,800 million euros of turnover from its eCommerce.
Starting this 2022, the chain the start-up of El Corte Inglés Advanced Logistics, its new subsidiary that, as of March 1, will make its wide network of warehouses, distribution centers, points of sale and, of course, its workers available to brands; all this in order to enhance its logistics and distribution network. And that’s without counting the activation of the El Corte Inglés Plus app, a service similar to Amazon Prime with which, with a flat rate of €19.90 per year, you can receive orders in two hours with no shipping costs.
The potential of the union of El Corte Inglés and Tendam in terms of eCommerce
If the union of the brands of the Tendam group to El Corte Inglés materializes, its numbers at the level of sales through eCommerce would rise to large scales. According to data from , this was the turnover of the main stores of both companies during 2020:
- The English Court: 1,634 million euros (3rd in the ranking of the online stores that obtained the most sales in Spain that year).
- Cortefiel: 23 million euros.
- Springfield: 31 million euros.
- Pedro Del Hierro: 4.2 million euros.
- Women’secret: 38.2 million euros.
In any case, El Corte Inglés’ growth plans are not limited to Tendam. According to , the historic retail giant is considering other absorption options, such as Mango or Scalpers.
Photo: The English Court
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