The pandemic has been a boost for electronic commerce in Spain. Also for El Corte Inglés, which before the appearance of Covid-19 was already in the top 3 of online distribution, and which has skyrocketed its income in this way as a result of the confinement and subsequent limitations to physical commerce.
At the close of the first semester of its fiscal year 2020, between March and August, El Corte Inglés has already billed 56% more than in all of 2019 through the online channel, and triple compared to the same period last year, according to the financial information provided to investors this Friday. A total of 1,437 million for the 919 of the previous full year, and which represent 32% of the group’s semester income from its commercial activity, when at the end of 2019 they accounted for 7%.
The largest increase occurred between March and May, the months that make up its first fiscal quarter and that coincided with the severe confinement decreed in Spain. During this period, online sales grew by 281.6%, reaching 1,010 million. In other words, in three months El Corte Inglés had already exceeded the online billing for all of 2019, breaking the 1,000 million barrier for the first time. That amount represented 60% of all its retail revenue in those three months, in which it was only able to open Supercor’s supermarkets and the food departments of its shopping centers.
In the second quarter, with the reopening of physical commercial activity, online growth continued to be high, 123% compared to the same three months of 2019, reaching 426 million and representing 15% of the income generated in its retail activity.
“During the months of confinement, El Corte Inglés has been the leader in online commerce in food and home, the two categories of products most in demand in this period; in addition, it has been placed on the ecommerce podium in areas such as fashion, electronics and sports ”, the company highlighted in a press release.
Omnichannel is an obsession for operators of classic distribution and who, forced by the times, have immersed themselves fully in online commerce. In the case of El Corte Inglés, it is the basis of the strategy outlined by its CEO, Víctor del Pozo. Initiatives such as the new mobile application, which has exceeded 300,000 downloads; the El Corte Inglés Plus service, a flat rate of 20 euros per year to receive orders in two hours without shipping costs and that is already used by 100,000 people; or the group’s plan to exploit its logistical capacity to the maximum, negotiating agreements with a hundred brands, as this newspaper announced on October 26.
Initiatives that reveal El Corte Inglés of the future. At present, the company has to deal with the effects of the pandemic, somewhat minimized in the second quarter, a period in which it once again registered a positive ebitda, in this case of 64 million, after closing the first with a negative one of 225 million. The balance for the first semester shows a negative EBITDA of 131 million, applying consolidation adjustments and the impacts of IFRS 16 accounting regulations.
Total revenues between June and August were 2,817 million, a 30% drop compared to the same period last year. Most of this adjustment is explained by the crash of the travel agency, punished by the virtual disappearance of tourism. This had sales of 64 million, 93% less, registering a negative ebitda of 40 million in a key period such as the summer campaign. The commercial activity carried out through its stores, department stores and online business recorded a turnover of 2,843 million, a decrease of 13% compared to, with a positive ebitda of 48 million, 70% lower than the same period last year. The insurance business also reduced its income, 13%.
With all this, the company chaired by Marta Álvarez concluded the first semester with a total turnover of 4,489 million, 39% less; with a negative ebitda of 131 million, and with a gross profit of 1,285 million, also 39% less. It did not report the net result for the period, something it did in the first quarter, showing losses of 510 million.
Net debt as of August 31 stood at 3,266 million, 17% less than at the end of the first quarter. On that date it had a liquidity of 2,192 million.
Christmas. In the documentation sent to investors, El Corte Inglés showed its “confidence” in having a good performance during the next two commercial campaigns that the company faces, “keys” according to its own definition. Those of Black Friday, in this same month of November, and that of Christmas. He also underlined the resilience of its financial structure to the effects caused by the pandemic. “The group has returned to positive results in the second quarter despite the current situation, and reached liquidity levels that ensure the financial stability of the company,” he said in that presentation. Something to which must be added the issue of 600 million euros in bonds undertaken during the month of September.
Future. In this sense, the distribution company said that for the future “it maintains its policy of business diversification, a permanent push for digitization and a firm commitment to those aspects related to corporate social responsibility.”