Uterqüe closes: the rise and fall of Inditex's expensive brand
If social networks serve to know where a company is going, the last official message of Uterqüe Through Twitter he wished, in English, a happy 2022. Far is that January 1 in which the Inditex brand congratulated a year in which it will close its more than 80 stores to integrate into another banner of the group, Massimo Dutti.
A closure that includes its 27 establishments in Spain - it has stores in another 15 countries - and that takes place in goodbye to Pablo Isla, president of the company that when the quarter is over, will yield the witness to the daughter of the founder of Zara, Marta Ortegaand its CEO, Oscar García Maceiras.
Uterque online shop
Uterqüe will cease to exist as a chain with a life of its own, after almost 14 years of existence in which it has been the brand with the highest prices of the Galician group, with stores that, in the words of Isla, in 2008, aspired to be "elegant " and located in commercial arteries such as Calle Serrano in Madrid or Passeig de Gràcia in Barcelona.
Uterqüe began to walk almost 14 years ago. It is the latest brand created to date by the company from Arteixo which, since then, has neither acquired more banners nor launched new formats. The last acquisition was that of Stradivarius. Inditex bought it in 1999 from the Triquell family, in an operation valued at 18,000 million pesetas at the time, which at current exchange rates would be around 108 million euros.
Under a Latin word that means 'the one and the other', Inditex sought to gain a foothold in the segment of accessories, bags and costume jewelery with Uterqüe, although it later made the leap to clothing, but with lower sales prices. higher than those of Zara or Massimo Dutti, which now, and at least for now, will serve as an umbrella.
What happened to uterque
The decision to close the Uterqüe stores was made public last September. It is the second time that the multinational decides to eliminate a brand. In 2006 he did it with Often, a menswear chain that did not reach 40 stores in Spain and Portugal. He teaches that he failed to gain a foothold in the market and that today hardly anyone remembers.
Basically it is a problem of dimension within the group, of presence, especially when compared to Massimo Dutti, which, in theory, is the brand that most closely resembles it.
At the end of the last full year (Inditex closes its accounts every January 31 and for 2021 there is still no data), Uterqüe had 85 stores in 16 markets compared to 677 for Massimo Dutti, which is in 74 countries. The first had revenues of 75 million euros; the second, of 1,197 million.
Was Uterqüe too small to have a life of its own? Profitable it was, although for the minimum. In the 2020 financial year, which includes the months in which the establishments did not operate due to the pandemic, Uterqüe had a profit before taxes (BAI) of one million euros, according to the latest report of the Galician group, which does not reveal net profits by chain . A year earlier, that BAI was 9 million, but in 2018 and 2017 it had remained at 5 million euros.
Beyond the economic data, Inditex justifies the closure of Uterqüe by the change of strategy communicated in 2020. In June of that year, after the confinements, Inditex published the first red numbers since it went public in 2001. It lost 409 million euros.
What's more, announced the closure of up to 1,200 establishments in two years – between 250 and 300, in Spain – and that's where the more than 80 Uterqüe stores will enter. He also reported that his investments were turning towards digital stores, to which he would allocate 1,000 million euros. It "is going to significantly transform the company's profile," Pablo Isla justified investors.
And not only is closing Uterqüe. In recent months, Inditex has also lowered the blinds of the Bershka, Pull & Bear and Stradivarius stores in China, according to the economic newspaper 'Cinco Días'. Brands that in the Asian giant already only operate 'online'.
Uterqüe, corporately, is already integrated within Massimo Dutti. At the moment it will be sold on its website and in certain stores, but its long-term future is not yet designed.
The process of closing the Uterqüe stores will take place in the coming weeks and, according to Inditex, the objective is to conclude it before the end of the first quarter of the year.
But, in parallel, it remains to be seen what will happen to the almost 200 employees it has in Spain, according to Ángeles Rodríguez Bonillo, Trade Coordinator of the Federation of CCOO Services. She also explains that on January 10, the company announced that it was opening a procedure for the substantial modification of the working conditions and geographical mobility of workers, based on article 41 of the Workers' Statute.
At the moment, Rodríguez Bonillo points out, two meetings have been held in a negotiation process that will take place until next Wednesday and where the company has conveyed that its intention is to relocate the affected workforce. "We have been told that the closure is part of the company's transformation process and we cannot influence that. What we ask is that the conditions be guaranteed and that it not affect the workers of Massimo Dutti either," says the CCOO representative.
Specifically, they demand that the entire Uterqüe workforce be relocated either to Massimo Dutti or to any other brand of the group, that even if there is geographical mobility, the closest alternative is chosen and that hiring hours and working hours are maintained, in a that contracts from Monday to Saturday do not become contracts from Monday to Sunday.
If there is an agreement with the representatives of the squad, it will be known in a week. Meanwhile, to find out more details about the future of Uterqüe under the umbrella of Massimo Dutti – and the general situation of Inditex – we have to wait until March 16, when it will present its 2021 results. That day, too, will be the last meeting with the investors of Pablo Isla.