Spain's largest department store chain has refused to expand into Russia and Eastern Europe.
The largest Spanish chain of department stores, El Corte Ingles, has refused to expand into Eastern Europe, including Russia. The company's Board of Directors adjusted its anti-crisis development plan under pressure from the workers' union.
Against the background of the second wave of the virus spreading in Spain, the El Corte Ingles management announced cost optimizations. One of the reasons was the workers' union of the company, which applied for the payment of wages for downtime and additional benefits for employees dismissed due to the crisis. The company's management has reportedly decided to meet some of the union's demands by cutting costs.
With more than 90 large department stores in Spain and Portugal, El Corte Ingles has been operating on the market since the 1940s. In 2019 the group estimated turnover at more than 15.2 billion euros.
Plans to enter the Russian market Spanish retailer hatched since late 2018. The chain planned to open two department stores in Moscow and two - in St. Petersburg, costing between 5 and 8 million euros each. At the same time, the management considered the possibility of expansion into Romania and Bulgaria.
Experts note that in the Russian market, the format of classic department stores is not very popular. In particular, the British network Debenhams could not consolidate in Russia. One of the few international players in this segment is Stockmann, working in Russia in the negatives in recent years. In the world's largest markets, department store chains have been doing badly recently. In particular, the U.S. networks J.Crew and JCPenney in 2020 were forced to initiate bankruptcies due to billion-dollar debts.
Photo credit: El Corte Ingles / Photogenica.
6 NOVEMBER 2020, Spain