El Corte Inglés reorganizes its shareholding

End to the struggle within the shareholder base of El Corte Inglés. The board of directors of the Spanish department store group has approved buying for 145 million euros the shares held by its former president, Dimas Gimeno, and his mother, María Antonia Álvarez, sister of the late Isidoro Álvarez. These shares are equivalent to 5% of El Corte Inglés' capital, a stake that will now become treasury stock, that is, shares directly controlled by the company. The purchase of 5% for 145 million is equivalent to valuing 100% of the group at 2,900 million euros, a figure that is very far from the 10,000 million valuation the company reached in 2015, when the Qatari sheikh Al Thani entered its capital.

In addition to the current crisis context, this valuation difference is significantly influenced by the fact that the shares of Dimas Gimeno and María Antonia Álvarez are not directly from El Corte Inglés, but from an instrumental company, IASA, where mother and son do not have the majority, but rather it is controlled 69% by Marta and Cristina Álvarez, daughters of Isidoro Álvarez and cousins of Gimeno. Marta Álvarez is the current president of the group. Specifically, Gimeno and his mother own 22% of IASA and, in turn, IASA controls 22.18% of El Corte Inglés, which makes this holding company the second largest shareholder of the chain, behind the Ramón Areces Foundation (37.39%).

By transforming that indirect 5% stake into treasury stock, IASA will reduce its weight in El Corte Inglés' shareholding from 22.18% to 17%. This 17% will now be controlled by around 90% by the Álvarez sisters; their uncle, César Álvarez, will retain his stake in IASA, now 9%.

With this decision, the distribution company closes an episode of strong disagreements between Dimas Gimeno and the sisters Marta and Cristina Álvarez, a war between cousins that has been waged for the last five years. Gimeno acceded to the presidency of El Corte Inglés in 2014, after having been chosen successor by his uncle and previous president, Isidoro Álvarez. However, Álvarez left the share control of the distribution group in the hands of his daughters, who were initially removed from management, although over the years they gained prominence and confronted their cousin's decisions. The family conflict went to court and Gimeno ended up losing the pulse, which led him to abandon all his positions at El Corte Inglés in 2018. However, it has not been until now that he has also been able to divest his shares. His participation and that of his mother was captive within an instrumental company controlled by his cousins, so it was difficult to find a buyer if they did not facilitate it.

In the end, a solution has been found and it has been the group itself that has agreed to buy the share package in exchange for the withdrawal of the lawsuits. The 145 million agreed will be paid in three years and will allow Gimeno and his mother to settle the 70 million debts they have with the Treasury for the inheritance left to them by Isidoro Álvarez.

According to Expansión, Dimas Gimeno is currently immersed in a new business project, Kapita, an investment company that will take stakes in companies in the distribution sector or in firms that develop technologies for retail. He has already invested in Fashionalia, Jogo Tech and Simplicity, in addition to launching the online store Wow, which also plans to grow with physical stores.

El Corte Inglés operates in Barcelona through four department stores located in Plaza Catalunya, on Avenida Diagonal, in Portal de l'Àngel and in Can Dragó. A few days ago, the group closed the store it owned next to Francesc Macià and which it had inherited from Galerías Preciados. The property that housed this establishment was sold by the company to an investor who has opted to launch a project to transform the building into offices. In Catalonia, El Corte Inglés also has a presence in Sabadell, Tarragona and Girona.