This is the Inditex that Marta Ortega inherits after the unexpected goodbye of Pablo Isla

If the Stock Market is a thermometer of how investors see the future of a listed company, in the middle of the session this Tuesday, their expectations about Inditex have punished the owner of Zara with a fall of more than 5%. What is the reason for this cut? Markets do not usually like uncertainty and now Inditex opens a new stage after years characterized, precisely, by the certainty in its management model.

Marta Ortega will assume the presidency of Inditex replacing Pablo Isla

Marta Ortega will assume the presidency of Inditex replacing Pablo Isla

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The Galician company completely changes its senior management, with the appointment of Marta Ortega, daughter of its founder, as new president; the goodbye of his predecessor Pablo Isla, after 17 years in the company; and the appointment of a new CEO, Óscar García Maceiras, who until now had had a minor and brief role in the management of the Galician group, which he arrived last March as secretary of the board of directors.

The arrival of Marta Ortega to the presidency is not a surprise. Inditex has been weaving a network of few and well-cared public appearances for some time that hinted that it was going to become a successor. The surprise is the goodbye of Pablo Isla. Not in vain, he himself assured a decade ago that he would be "all his life" at Inditex. It will not be so.

The Inditex model does not change

"Why are we tackling this transition now? Because it is an ideal moment, we have a defined strategy, with a combination of youth and experience," Isla himself assured in a brief appearance before the media in which, for the first time, García Maceiras has intervened as the new CEO. "We have been preparing this succession for some time, discreetly, as we do everything at Inditex," Isla repeated.

That has been the main characteristic of his 17 years in the Arteixo company, a low profile, where almost all his appearances before the media and investors were marked by the continuity in his speech, with two axes on the priorities in the management of the multinational : an integrated model, between physical and digital stores; and a capacity to maneuver in its production model - criticized for focusing its manufacture, above all, in Asian countries, but also in nearby markets, such as Turkey or Morocco - that allows it to change the pace faster than its competitors.

"The company's model will continue. The essence of our business, integration, design, logistics, the ability to react, the values ​​of Amancio Ortega that we breathe. We will continue working with the same model," he stressed Isla. In fact, he, for the moment, is not leaving, he will remain in the presidency until April 1.

But change your separation of powers

The first key change is the cast of roles. Marta Ortega will be president, but she will not be an executive, as Isla has been until 2011. That role remains for the new CEO, García Maceiras, who does not have to wait until April to take up his position, since his appointment is effective from righ now.

His profile is not usual in the distribution. García Maceiras is a state attorney and his career has been linked to banking and the financial sector: Banco Pastor, Popular, Santander or Sareb, the bad bank. Now, he will have to exercise the direction of the textile group that, in part, he will share with the until now CEO, Carlos Crespo, who has been at Arteixo for two decades and will continue to be part of the management committee as general director of operations, sustainable and digital transformation .

Meanwhile, Marta Ortega will preside over the board of directors as a proprietary one. In other words, he will sit on the board of directors representing 60% of the capital that is in the hands of his father and founder of Zara. In addition, he will be in charge of Zara's image and product design for the group's main brand.

The executive role is, therefore, in the hands of Óscar García Maceiras. A separation of roles that is preferred, in good corporate governance, because, in theory, it separates the day-to-day operations of the company, the management of operations, from the shareholder representation. But Inditex is more about talking about "teams than about people ", in Isla's words.

First date with the market, in a week

Inditex has announced today the change in its leadership, but has not spoken about how its results, its sales or the prospects are going before the outbreak of the pandemic. He will do it on December 15, when he has to communicate how he has done until October 31, when he closed his third quarter of the year. Results where, a priori, its new CEO will play a leading role.

Now, the parent company of Massimo Dutti, Oysho and Pull & Bear, among other brands, is immersed in the final stretch of its fiscal year, a key financial moment, because it concentrates the Christmas season and the winter sales, which will mark its annual result.

And it reaches this moment with more than 6,600 stores and with its sales going back after the step back of 2020, where the Covid led to having a large part of its network closed. In the middle of the year, Inditex had a turnover of 11,936 million euros. Of that figure, 14% corresponds to Spain, more than 46% to the rest of Europe and about 22% to the Asian market.

A company in transformation

But beyond the figures, Marta Ortega and Óscar García Maceiras inherit a company in transformation, within the continuity in the model that the company emphasizes. It is because a year ago, the group announced the closure of up to 1,200 stores, until 2022, and the relocation of the affected templates.

At the same time, it closes small stores to focus on larger premises, with more sales and warehouse space, which it takes advantage of for its online store. This is the other part of your transformation, growth in digital.

Your income is shifting the weight to online. At the end of its first quarter, the network had shot up its income by 36% compared to 2020, in the middle of the pandemic; and 137% compared to the first half of 2019. By the end of the year, it is expected to be a quarter of all its income.

Ortega raises the presence of women at the head of the Ibex

The arrival of Marta Ortega to the presidency of Inditex will increase the presence of women in the management positions of the Ibex 35, although it is still small. Currently, there are only two women presidents: Ana Botín, at Banco Santander; and Beatriz Corredor, at Red Eléctrica.

In addition, there are two CEOs with executive power in their companies. On the one hand, María Dolores Dancausa, at Bankinter; on the other, Cristina Ruiz, at Indra. However, Ortega will not have, at least for the moment, that management power.

Therefore, a priori, you will not receive a remuneration at Inditex linked to that executive capacity. As a reference, in 2020, Pablo Isla collected 5.9 million euros; more than half of the 10 million received by the entire board of directors. On the other hand, Amancio Ortega received 100,000 euros as a director. An insignificant figure compared to the more than 1,200 million that it receives as a dividend, since it controls 60% of the capital.

Another question is what will happen to Pablo Isla. For now, he assures that he will be focused on managing the succession, until April. "Later, we'll see," he acknowledged.


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