El Corte Inglés leaves losses behind and obtains a net profit of 120 million euros in 2021

Theresa Sanchez VincentCONTINUE
Updated: 06/10/2022 14:15h
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After
the historical losses of 2,945 million registered in 2020
, a year marked by restrictions and the pandemic, El Corte Inglés returns to record profits. The group chaired by Marta Álvarez consolidated its positive evolution in 2021 with a 22% increase in sales, to a total of 12,508 million euros. Consequently, the company recorded an EBITDA of 805 million and a net profit of 120 million. From the distribution group they explained that the improvement is determined by the good evolution of the business, the optimization of costs and the "successes" in management.

In this way, El Corte Inglés consolidated the growth of the business and already exceeded the figures for the 2019 financial year in the first quarter of 2022, the precedent to the outbreak of the pandemic.

"This has made it possible to recover the path of growth and return to profits despite all the difficulties caused by the successive variants of Covid, the scant recovery in tourism, the complex economic context and an unprecedented escalation in energy prices," according to They pointed out from the Spanish company in a statement.

Thus, and despite suffering a context of runaway rise in costs, the group obtained a gross profit of 3,896 million euros, with an increase of 30.5% compared to the previous year. For its part, the gross operating result (Ebitda) stood at 804 million euros, 756 million more than the previous year.

The engine of the recovery was the 'retail' business thanks to the end of restrictions in stores, where sales of 11,300 million euros were reaped. The comeback in the fashion area also stands out, whose growth stood at almost 49% compared to the 2020 financial year. The group also highlighted "the good performance of online sales", which already represents 12.3% of the total business volume of the department stores.

The firm pointed out that the trajectory of the last financial year, which ended at the end of February 2022, was possible thanks to the planning carried out in advance to guarantee the availability of merchandise, especially in the Christmas season. It also attributes the return to profits to "efficient" negotiating with suppliers, better planning of purchases and limited exposure to acquisitions in Asia.

By areas of 'retail' activity, fashion soared to achieve a sales figure of 4,090 million euros (48.8% more than the previous year). Along the same lines, the culture and leisure area recorded an increase of 11.5% and a turnover of 2,145 million. Sales of home and electrical appliances also registered a strong evolution, reaching over 1,302 million, 11.3% more. In the food area, sales volume stood at 2,648 million, that is, a decrease of 4.8%.

Improved travel

Regarding the behavior of non-retail businesses, the significant improvement of Viajes El Corte Inglés should be noted despite the persistence that the effects of the pandemic have had for much of the year. In detail, sales reached 984 million euros, with a growth of 218.6% over the previous year.

In the Insurance area, activity maintained an upward trend with revenues of 217 million euros (2.8% more than the previous year) and an EBITDA of 98 million, that is, an increase of 5.4%. From the company they advanced that the strategic alliance with the Mutua Group, already signed in the 2022 financial year, will allow them to offer El Corte Inglés customers "a better, more complete and personalized insurance offer."

It should be remembered that, in recent weeks, El Corte Inglés has chained
new closures as part of its store reorganization strategy
which has accelerated coinciding with the entry of Mutua Madrileña in its capital, according to ABC. These movements focus on leaving behind the smaller centers, which are rented and do not offer the full range of the group. The group's commitment is now focused on stores with a larger area, with more floors and a greater assortment of items in all categories.

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