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El Corte Inglés transfers 3,500 employees to its new logistics subsidiary to compete with Amazon

2022-01-18T04:54:26.027Z


The company will start operations on March 1. The distribution company and Palladium sell five hotels to the French investment firm Eurazeo


The new logistics subsidiary with which El Corte Inglés hopes to stand up to Amazon and take advantage of the pull of electronic commerce will start operating on March 1. In recent weeks, the department store chain has segregated all its logistics assets, except real estate, and has brought them together in a company founded last summer, El Corte Inglés Advanced Logistics, to which nearly 3,500 group employees will be transferred, as reported by the company to the unions on Monday. The company thus takes a big step in its plans to diversify its business, boost online sales and rely less on traditional retail.

The changes are expected to take effect from March, which is when the company's fiscal year begins, company sources said. Currently, the management of the logistics services of El Corte Inglés —the internal operations carried out between its centers, including Hipercor and Supercor, and

online

sales— is valued at around 400 million euros.

The company has agreed with the unions to maintain the working conditions (contract, hours, agreement and vacations) of the 3,500 employees who form part of the group's workforce and who will be transferred to the subsidiary. El Corte Inglés has two large logistics centers, one in Valdemoro (Madrid), with some 2,200 employees, and another in Montornés del Vallès (Barcelona), with some 650 workers. With the new subsidiary, it is not only intended to promote its own electronic commerce, but also to offer the service to third parties.

The trade union organizations have highlighted "the great potential" for growth in this sector and the leap that the company will make with the subsidiary in online commerce.

"This new autonomous business unit will go from providing a service exclusively to El Corte Inglés, to competing with large operators in the sector", CC OO, UGT, Fasga and Fetico have pointed out in a joint statement.

The logistics subsidiary of El Corte Inglés has set itself an ambitious goal of extending its

online

channel , but it faces Amazon, owner and lord of electronic commerce in Spain, with 12,000 permanent workers in the 30 logistics centers it has in the country, and has plans to increase that workforce to 25,000 troops in 2025.

In addition, the distribution group has called an extraordinary general meeting of shareholders for next January 26 in order to give the green light to the agreement for the entry of Mutua into its shareholding, through which the insurer acquires 8% of the capital for 555 million euros, with the commitment to go public before 2028.

The Ayre Gran Hotel Colón, in Madrid.ÁLVARO GARCÍA

Sale of Ayre hotels

One of the main points of the company's strategy is to gain weight in new businesses to reduce its dependence on its traditional activity, whose sales were greatly affected by the pandemic. Another area in which it wants to reinforce itself is that related to luxury tourism. In this sense, El Corte Inglés and Palladium Hotel Group (owned by the Matutes family) announced this Monday the sale of five Ayre brand hotels, 50% owned by the distribution group and the Spanish tourism group, to the company of French investment Eurazeo. These five hotel establishments total nearly 800 rooms, located in Barcelona, ​​Madrid, Córdoba and Oviedo, as well as a plot of land in Porto (Portugal). The funds obtained by the operation, which have not been detailed,they will be used to grow the Only You luxury urban hotel brand.

For its expansion in this segment, “both companies are analyzing various options in privileged locations in various cities, both in Spain and in other countries,” says the note. El Corte Inglés and Palladium Hotel Group have operated together in the hotel sector since 2006 with the Only You Hotels and Ayre Hotels brands. For the operation, which is subject to the authorization of the competition authorities, they have had BBVA and Deloitte as financial advisors, and Arcadis as technical advisor.

In addition, the companies foresee the transformation of Ayre Hotel Sevilla into a new Only You. The latter will be added to those that the chain already has in Madrid (Atocha and Barquillo), Valencia and Malaga (the latter under management). “Only You hotels are always located in the most central and vibrant neighborhoods of each destination and customer ratings in the main traveler opinion portals, such as Tripadvisor, place them at the top of the rankings of each city”, confirms the statement.

The operation coincides with an upward trend in the luxury segment. While tourism in general continues to struggle to recover from the pandemic hit, wealthier citizens are already traveling and spending as much as they did before covid. This is how the companies in the sector in Spain allow it to be glimpsed, where they still occupy a small space compared to mass tourism. In this way, the sector has room to grow profitably and El Corte Inglés wants to focus part of its efforts on taking advantage of it.

Last December, the distribution company began the relaunch of its Utópica travel agency, focused on the

premium segment,

and became part of Virtuoso, a world reference for its prestigious network of luxury travel agencies. According to data from the luxury agencies that are members of this network, these visitors spend an average of $20,000 per home and trip. And Spain is placed as the fifth country that most request, only behind Italy, France, Mexico and Greece. In addition, Madrid is standing out in a special way as an attractive destination for this segment after the arrival of hotel chains of recognized international prestige such as Four Seasons, Rosewood or Mandarin Oriental.

In parallel, El Corte Inglés announced last June its merger with Logitravel to create a travel giant with more than 500 points of sale in the world, a leader in the sector in Spain and with the aim of competing with large multinationals such as TUI in a time of fierce competition for offers on the internet.

According to 2019 data, between the two divisions they exceeded 3,500 million euros in revenue and had more than 5,000 employees.



Source: elparis

All business articles on 2022-01-18

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