Inditex Reorganises its Logistics & Unifies its Warehouses for Online & Physical Stores

28 February 2018 – El Economista

In recent years, one of Inditex’s big secrets has been its logistical efficiency and its capacity to move any garment anywhere in the world in record time. Nevertheless, the development of its online business has now forced the Galician fashion giant to go a step further.

With the aim of reducing costs and increasing its profit margins, which have been decreasing systematically since 2012, Inditex has launched a project to unify the management of stock for its physical and online stores. The idea is that the same warehouse should be able to supply stores on the high street and in shopping centres, as well as customers who buy garments through the website.

The project forms part of the company’s digital integration policy. In fact, data collected by Inditex shows that a significant proportion of customers make their purchases online in the same physical store and that around 60% of the returns and exchanges for products purchased through the online channel are managed in a physical store.

Omnichannel strategy

In this vein, in recent months, Inditex has been strengthening its omnichannel strategy. In this way, at its store in Marineda, in La Coruña, it has opened an automated delivery point, with capacity for up to 700 packages, where users may pick up orders they have placed online without having to wait.

After launching that project last September, under the development of its equipment at the Technological Centre in Arteixo (La Coruña), the company explained that its aim is to take a step further towards the integration of its physical and online stores.

Improved deliveries

In December, the President of Inditex, Pablo Isla, announced that the group had started to offer same-day delivery in six cities – Madrid, London, Paris, Istanbul, Taipei and Shanghai – and next-day delivery in Spain, France, the United Kingdom, Poland, China and South Korea.

According to Isla, it is about looking for an “increasingly comprehensive management of the online business”, whereby allowing improvements in delivery times. Just a few weeks ago, at the end of January, Zara, the flagship brand of the Galician group, unveiled the first store in the world that specialises in making and collecting online orders, as well as processing any returns or exchanges, at a new store in the Westfield shopping centre in Stratford (London).

That is a pop-up or temporary store, which will remain open until the flagship store in the same shopping centre is reopened in May, which is going to see its surface area double to 4,500 m2 with a completely new concept.

“The staff in that store use tablets and mobile devices to help customers, who have the option of receiving their orders just a few hours later – if the order is placed before 14:00 – or the next day – if it is placed after that time. It also facilitates the payment system thanks to an innovative system of bluetooth card payment terminals”, explain sources at Inditex. The company, which has 7,504 stores in 94 markets around the world, has an online presence in 45 countries and is continuing to make progress against the large online platforms, such as Amazon and Alibaba. Meanwhile, the stock market is still punshing the group for its falling margins; on Tuesday, its share price fell again, by 0.86% to €25.25.

Original story: El Economista (by Javier Romera)

Translation: Carmel Drake

Martinsa’s Board Approves The Liquidation Of The RE Company

3 March 2015 – Cinco Días

The largest ever property and land sale in Spain’s history begins

Yesterday (Monday), Martinsa Fadesa held what will possibly be its last ever Board meeting. During the meeting, it was agreed that the company would begin liquidation proceedings and that today (Tuesday), it would file a petition to the Commercial Court in La Coruña, for the liquidation of the group, after its main creditors failed last week to approve the proposed agreement presented by the company.

Last week the deadline ended for Martinsa Fadesa’s creditors to sign up to (or reject) the proposed agreement presented by the company on 30 December 2014. According to financial sources, the main creditors, including Sareb, CaixaBank and Popular (which held €1,457.8 million, €907.9 million and €574.2 million of the company’s debt as at 30 June 2014, according to those sources) all opposed the agreement.

“Martinsa’s proposed agreement is not feasible, the business plan that has been presented is not credible”, said the financial sources. “As a result of the liquidation, the creditors will have access to €980 million in terms of asset value”, they maintain, “and the creditors will have access to more transparent information during the liquidation process”.

Martinsa Fadesa recorded a net negative equity position of €4,603.4 million at the end of 2014 (€4,288.6 million in 2011), according to the annual results presented by the real estate company to the CNMV. The company closed last year with assets worth €2,392 million and liabilities amounting to €6,995 million; it recorded losses of €313.6 million in 2014 (51.9% lower than in 2013) and increased its turnover by 18.3% to €130 million.

Between 2006 and 2007, Fernando Martín, the Chairman of Martinsa Fadesa, agreed to purchase Fadesa from Manuel Jove, in a transaction worth €4,045 million. In 2008, Martinsa Fadesa filed for bankruptcy and in 2011, it agreed a payment schedule to allow it to emerge from the bankruptcy situation. That same year, the company decided, in a shareholders’ meeting, to file a social responsibility claim against Jove and Fadesa’s former CEO, Antonio De la Morena for €1,576 million. Commercial Court number 1 in La Coruña and the Provincial Court of La Coruña both rejected the claim filed by Martinsa Fadesa and so the company appealed to the Supreme Court. Last month, the Supreme Court also rejected Fernando Martín’s claim.

For the last two years, Martinsa has failed to meet the payment commitments established in the agreement that allowed the company to emerge from its bankruptcy proceedings (these amounted to €451 million in 2014). The Supreme Court’s rejection of the company’s claim was the last straw for the real estate company. The group had assured its creditors that it would use the money to pay them if it won its appeal at the Supreme Court; however, having now lost its claim, the company will have to also pay the legal costs associated with the process, which legal sources estimate could amount to €60 million.

Experts in bankruptcy matters consider that Martinsa Fadesa’s liquidation process will be the largest to ever to take place in Spain.

The same experts explained that the bankruptcy judge may reinstate one, two or three members of the previous bankruptcy administration team, however given the size of the liquidation process that is now beginning, it would be usual for Ángel Martín Torres (KPMG), Antonio Moreno Rodríguez (Bankinter) and the lawyer Antonia Magdaleno to jointly take charge of the liquidation.

Claims of €34 million for construction defects

Martinsa Fadesa is facing 32 civil lawsuits of more than €50,000 (each) brought by groups of owners and individual owners for construction defects. At the presentation of its latest results, the company explained that the total amount claimed in these cases amounts to €34 million. In addition, the group is also facing other kinds of legal processes. One item that stands out is the €19.4 million provision that Martinsa has made in relation to the group’s development in Miño, La Coruña. “Claims have been filed with both the Commercial Registry and the Civil Registry by house buyers in this area, with the result that some of these cases have been declared resolved in the contracts, which means that the company will have to return the amounts received on account from these clients”, explained Martinsa Fadesa.

In its 2014 accounts, the company states that it has a deferred payment agreement with the Tax Authorities for the amount of its privileged bankruptcy debt, i.e. €47.68 million. That debt fell/falls due on 20 December 2014 (€9.6 million) and 20 December 2015 (€38 million), respectively. Martinsa requested and obtained “reconsideration of the due date of the instalment relating to 2014” from the Tax Authorities. The new payment date has been set for 20 May.

In 2014, Martinsa Fadesa employed 150 people (161 people in 2013). Last year, the group incurred staff costs amounting to €14.3 million (€12.9 million in 2013).

Original story: Cinco Días (by Alberto Ortín)

Translation: Carmel Drake