The Board of Directors of Inditex resolves the appointment of Marta Ortega as Chairwoman, and Óscar García Maceiras as CEO

The Board of Directors of Inditex, at the proposal of its Chairman Pablo Isla and its founder Amancio Ortega, and following the proposal of the Appointments Committee, has approved the appointment of Marta Ortega Pérez as Chairwoman of the Group, with the status of dominical director, an appointment that will be effective as from 1 April 2022, according to the relevant fact published today by CNMV (Spanish National Stock Market Commission).

Likewise, Óscar García Maceiras, until now General Secretary and Secretary of the Board, has been appointed CEO of Inditex. Óscar García will take over from Carlos Crespo González, who until now and for approximately two years has had a long career in the company after joining in 2001.

“We are enormously grateful to Pablo Isla for his extraordinary work and dedication over all these years. I would like to highlight his immense contribution, not only to our Group but also to the fashion industry in general. I have lived this company since my childhood and I have learned from all the great professionals I have worked with over the last 15 years. I have always said that I would dedicate my life to developing the legacy of my parents, looking to the future but learning from the past and in the service of the Company, our shareholders and our customers, wherever I am most needed. I am deeply honoured and committed by the trust that has been placed in me, and enormously excited about the future that we are all going to undertake together. Marta Ortega.

The new organisational structure incorporates a Management Committee, made up of executives from different corporate and business areas and with a long track record in the Group, as follow:

• Carlos Crespo González, General Manager of Operations, Sustainable and Digital Transformation, INDITEX, S.A. Digital, INDITEX
• Pablo del Bado Rivas, General Manager, PULL&BEAR
• Miguel Díaz Miranda, Chief Financial and Operations Officer, ZARA
• Ignacio Fernández Fernández, Chief Financial Officer, INDITEX
• Javier García Torralbo, General Manager of e-Commerce, ZARA
• Begoña López-Cano Ibarreche, Chief People Officer, INDITEX
• Beatriz Padín Santos, Women’s Director, ZARA
• Jorge Pérez Marcote, General Manager, MASSIMO DUTTI
• Óscar Pérez Marcote, General Manager, ZARA

The appointment of Carlos Crespo in 2019 was a foreseeable move, as he was considered until then, in fact, the number 2 of Pablo Isla, until now the Chairman of the Board of Inditex (and former CEO of the group), after his resignation today. His position as the group’s internal audit director had given him extensive knowledge of all the company’s departments. He was considered by many to be a “man of the house” and this led many to believe that he would be accepted by the whole team. However, it was also pointed out at the time that he had little connection with the product area, where Amancio Ortega’s trusted managers were and are to be found.

For some time now, there have been rumours of a change and reorganisation of the group’s management structure, motivated by the distrust of some of the executives close to Amancio Ortega, which presages the imminent departure of Carlos Crespo as CEO. Who will be his successor? This morning it was confirmed that he will be succeeded by Óscar García, until now Secretary General of the Board.

Until now the composition of the Board was as follows:

Source: www.inditex.com/es/compliance/buen-gobierno-corporativo/consejo

According to the last Annual Corporate Governance Report of Inditex, the chief executive officer (Carlos Crespo) as well as the executive chairman (Pablo Isla), would be entitled to receive a gross severance payment for an amount equivalent to 2 annual payments calculated on their respective fixed remuneration established for the current year, in the event that their contract is terminated unilaterally by the Company (as seems to have been the case), as well as the resignation of the managing director or the executive chairman due to certain causes (among these, company succession, or change of ownership of the company affecting more than 50% of the share capital or voting rights, provided that, at the same time, there is a significant renewal of the governing bodies or a change in the content and approach of its main activity, if the request for termination is made within 6 months following the occurrence of such succession or change. For these purposes, no succession or change of ownership shall be deemed to exist in the case of a direct or indirect family succession in the ownership of the company.

Pablo Isla and Carlos Crespo’s departure joins other departures that have taken place in recent months. Rodrigo Loderio (former Security Director), Antonio Abril Abadín (former General Secretary of the Board), Ramón Reñon (former Deputy General Manager to the Chairman), Ramón Rubio (former Financial Manager of Massimo Dutti) and Jordi Blasi (former Head of Zara’s men’s division) are some of the executives who have left the company.

Until now, Inditex has known how to listen to the market and take advantage of the right moment to review its structures and adapt its processes.

Related article: Inditex the company with the best corporate reputation

Is the eternal mirage of social media, from which no one is able to scape. No matter how good-looking, rich or famous you are, some content will hit you wherever it hurts you the most. We all admit that, most of the times, we only post edited, filtered versions of our lives, we all know that the rest of the world does it too, yet a part of us still wants to believe that what other posts is the actual, whole truth, that the grass really is greener at the other side of the fence.

This negative impact on the live of followers and influencers alike is just one of the reasons leading to the collapse of the traditional influencer profile, a phenomenon known as influencer fatigue: stagnation of creativity in terms of content, bad practices such as building ghost audiences to attract the attention of brands, or greedily accepting all kinds of “collaborations” with companies, sometimes light years away from the interests of their followers. All this factors have led to an increasing number of social media users who don’t trust and are fed of the classic influencers.

This does not necessarily mean that influencers’ days are numbered, but rather that there is a shift in the trend. According to the Vogue Business article, Meet the “genuinfluencers” who don’t want to sell you anything, written by Kati Chitrakorn, “while luxury brands are investing more in micro influencers (up 14 per cent in 2020 compared to the previous year, according to digital marketing firm Lefty), many have reduced their partnerships with macro and top influencers”.

The genuinfluencer that gives the article its title is a new player in the system, “creators who generate followers but who (…) are more interested in sharing advice, talking about their passions and spreading unbiased information, rather than promoting the sale of a new product or collection. They tend to be known for the high quality of their content, rather than their follower count, says Cassandra Napoli, senior strategist at WGSN Insight.” It’s therefore about presenting content that is more honest, transparent and focused on audience’s interest, rather than positioning products and services for brands. A return, if you will, to the innocent origins of the figure of the influencer, more or less anonymous people who shared their passions on the internet with no other motivation but the enjoyment they got from it.

“The landscape has totally changed in terms of who is considered a person of influence and how we define the term,” said Hilary Williams Dunlap, senior vice president of talent at Digital Brand Architects (DBA) for Vogue Business. The key attributes of the influencer now,” the article continues, “are a unique point of view, conversion and community. Brands are looking at how interactive and tightly-knit the following is and how influential the creator is within their community.”

The crises of all kinds that have shaken the world in recent times have been a catalyst for this shift in social platforms. To seduce generations Y and Z, companies have had to refine their strategy: environmental issues, gender inequalities, minority rights, etc. can no longer be ignored. It is impossible, of course, to deny the existence of a pandemic that has dramatically disrupted our consumer habits. The way to get younger consumers is to present themselves as social agents of change. Therefore, those brands that invest so much in presenting themselves as responsible, honest and with values, will not work with that old-fashioned type of influencer whose feed remains oblivious to the turbulence and in which the protagonist seems to lead a life of perfect happiness, full of luxury and long-haul trips that one does not quite know how he or she can afford. Transparency, vulnerability, and a reasonably sincere willingness to improve the lives of the audience; these are the values that consumers (and the smartest companies) are now looking for in their influencers. Let’s rejoice that the hypocritical, self-serving approach to social media is going out of fashion and let’s hope Bella Hadid’s example catches on.

Image: @chrisellelim

It was at this time when El Corte Inglés opened its shareholding to foreign investment, and it was the Qatari Sheikh Hamad Bin Jassim Bin Jaber Al Thani who acquired 10% of the company’s share capital for 1 billion euros. The company was valued at 10 billion euros, although this valuation was debatable and could have been slightly lower.

However, a few years later, in 2018, after suffering several years of family war and a change in the composition of the Board of Directors, the experts pointed out that the value of the company would not reach more than 4 or 5 billion euros.

This was the moment to analyze what strategic direction El Corte Inglés should take, being the European leader of department stores in the era of digitalization, something that seemed to be not exactly a compliment, given the massive closures and restructuring that were taking place worldwide and the consolidation of Amazon as a technological leader. Companies comparable to El Corte Inglés in the United States were closing, it was the “Retail Apocalypse”, as The Wall Street Journal had dubbed it at the time.

Moving from a model based on shop square metres to one in which El Corte Inglés could compete with the e-commerce giants was one of its major pending tasks.

The company’s proposal since then has involved the adoption of some vital measures, many of which are already a reality, and have been and are:

• Focus on e-commerce and omnichannel, also supported by a new App;
• focus on quality products and services and the shopping experience;
• transform its logistics process;
• create a real estate unit;
• relaunch Viajes El Corte Inglés and create its own training school;
• integrate Sanchez Romero to lead the premium food segment;
• expand its financial services;
• review and reinforce its corporate social responsibility policy; and
• launch a new shopping card in alliance with Mastercard.

Thus, the objective of the 2021-2026 Strategic Plan, which was approved in July this year, is to double the result with an Ebitda of 1,700 million euros, reduce debt by 60% (at the close of the 2020 financial year, it accumulated a debt of 3,811 million) and multiply online sales to represent 30% of the group’s turnover.

The reduction of this debt was made possible a few days ago thanks to the entry into the share capital of the Mutua Group (formerly known as Mutua Madrileña) with an 8% stake for 555 million euros. This agreement also includes the acquisition of 50.01% of the insurance division of El Corte Inglés for a further 550 million euros. In total, 1,105 million euros, which would be largely used to reduce debt. This indicates that the valuation of the company, which has been used in this last operation, has improved with respect to the 2018 estimates, and is 6,937 million euros.

All this suggests that a management model that is closer to the customer, that expands services and that is constantly being adapted, may be the key for not only El Corte Inglés but also for other businesses in the sector to be able to face the economic and social changes that are coming.

“Focusing obsessively on the customer as a priority is by far the best way to protect the vitality of Day 1 (…) customers are always wonderfully dissatisfied, even when they tell us they are happy. Even when they don’t know it, they always want something better. Staying on Day 1 requires patiently experimenting, accepting failures, planting the seeds and protecting the little trees that begin to grow (…) Day 2 is stagnation. Followed by irrelevance. Followed by painful decline. Followed by death. And that’s why it’s always Day 1 here. It is true that this kind of decline can happen very slowly. An established company can stay on Day 2 for decades, but the end result will come” (Bezos, 2017)

In a world still struggling to emerge from the pandemic, where brick and mortar stores are in crisis and where many people believe that the days of the department store business model are numbered, Monsieur Arnault is not afraid to swim against the trends. That’s why the French group has invested no less than 750 million euros in the restoration and refurbishment of La Samaritaine, located in the First Arrondissement of Paris, facing the Pont Neuf.

The mission, heroic and risky, seems however, the right fit for LVMH,  specialised as they are in breathing new life into the dustiest and most outdated maisons. If anyone can resuscitate this historic business, it is undoubtedly them.

La Samaritaine was born as a small neighbourhood shop founded in 1869 by Ernest Cognacq and his wife Marie-Louise Jaÿ. The couple applied the business principles of the then innovative Le Bon Marché establishment: fixed prices, exchange and return guarantees, a wide range of products, etc. Thanks to their business vision, La Samaritaine grew throughout the rest of the 19th century and the spectacular building designed by architects Jourdain and Sauvage in 1900 confirmed it as the most elegant department store in Paris, as well as one of the jewels of French Art Nouveau and Art Deco. The business began to decline in the 1990s and between 2001 and 2010, LVMH acquired it in its entirety. After almost twenty years of restorations, negotiations with the French authorities and, to top it all, a pandemic that has cut off the flow of tourists, the project is now a reality and La Samaritaine shines brighter than ever.

According to Laure Guibault’s article for Vogue Business, The LVMH game plan for La Samaritaine, LVMH-owned travel retailer DFS is in charge of operating the new 20,000 square metre space, with an emphasis on the shopping experience. “It was important to make a shop that differentiates us, given the competitive environment in Paris, so we conceived a place for living and strolling,” Eléonore de Boysson, president of DFS for Europe and the Middle East, told the magazine.

Along the same lines, Benjamin Vuchot, president and CEO of DFS, said: “In a world where commerce is undergoing tremendous change, we have to find new solutions. Hence food and beverage, spa, hair salon and so on. We strive to move away from the purely transactional aspect”.

The article goes on to say that, indeed, the fusion of fashion and food is central to the shop experience. There are twelve restaurant concepts, such as Street Caviar, which combines street food and caviar, conceived by Maison Prunier, and Dînette, by Dalloyau, which offers snacks in a doll’s house format on the womenswear floor. There is also L’Exclusive, offering pastries on the beauty floor. The restaurants are strategically located throughout the shop. “It’s what consumers want today, a promenade. I think food courts are outdated,” says De Boysson. Faced with the inevitable comparisons to Harrod’s, La Samaritaine sells French lifestyle in its purest essence, and in doing so aims to attract tourists and Parisians alike.

As we said at the beginning, the department store business model is not doing well lately, and this was so even before COVID-19 made its appearance. Consider  the bankruptcies of Barneys New York in 2019 and Neiman Marcus in 2020 (although the latter has dodged liquidation and continues in operation). In an interesting episode of her podcast Fashion Law Network, entitled Fall From Retail Royalty: Neiman Marcus, the attorney and specialist in Fashion Law Kasia Zebrowska-Trauben mentioned the impact of e-commerce and even demographic and sociological factors, such as the decline of the middle class as a socio-economic group, to explain this trend. In Spain, the leading exponent of this commercial model is, naturally, El Corte Inglés. Coincidence or not, at the last General Shareholders’ Meeting, a new strategic plan for the company was announced, which focuses on developing business channels other than retail. In this sense, Víctor del Pozo, member of the Shareholders Board, declared that El Corte Inglés will become an “ecosystem of services and businesses, where new activities (as a mobile operator, energy provider, security services, etc.) will play an important role”. Likewise, as reported by Modaes in its article “El Corte Inglés seeks new outlets for its ‘brick’: renting to third parties, ‘dark stores’ and outlets”, in the last year it has carried out several operations to make its real estate assets profitable, such as the sale or rental of some of its spaces, which seems to indicate that the company needs cash.

We’ll see what the future holds for the brand new Samaritaine; Benjamin Vuchot acknowledged to Vogue Business that business will be slow at first. “We know we have a difficult 18 months ahead of us. We expect a return to a decent level of travellers by mid-2022. When the tourists return, La Samaritaine anticipates around 5 million visitors a year.” To conclude, and in relation to the general crisis experienced by department stores, is worth mentioning the so-called “great bifurcation of retail”. This is a theory that Kasia Zebrowska-Trauben also referred to in her podcast and, according to which, in the current scenario, the establishments that are to prevail are of two types: either those  dedicated to the highest ranges of luxury, or, on the contrary, those that offer the lowest prices. Businesses in the middle range (such as most department stores) will often struggle to survive. La Samaritaine, for its part, with its strong focus on the most exclusive luxury, seems to have a bright future ahead of it.

Image: @samaritaineparis

Image: @cartier

The celebration of World Cotton Day provides an opportunity to recognize the historical importance of cotton as a global commodity grown in more than 75 countries (5 continents) and to highlight the key role it plays in creating jobs and maintaining economic stability. According to the International Cotton Advisory Committee, annual cotton revenues are estimated at $41.2 billion, while the value of cotton trade amounts to $18 billion each year.

However, while recognizing the key role cotton plays in several countries, and its economic and social effects, it is remarkable that cotton prices have reached their highest level in 10 years. Droughts and heat waves have wiped out cotton harvests in the United States, the world’s leading cotton exporter and in India the monsoon season threatens the country’s cotton production. Therefore, one of the factors that is influencing the increase in cotton prices is extreme weather.

“Most-active U.S. cotton futures trading on the Intercontinental Exhange closed Tuesday up 3.8% at $1.09 a pound, keeping prices at their highest level since September 2011. Prices have risen 22% over the past 11 sessions” as noted by the Wall Street Journal, 5 October 2021.

Moreover, demand for cotton has increased, especially in China. In December 2020, the United States banned companies from importing cotton and other cotton products from the western Chinese region of Xinjiang (China’s largest cotton-producing area) because of concerns that the Uyghur ethnic group produced it through forced labor. This situation has forced Chinese companies to buy cotton from the United States and manufacture the products in China to sell them back to the United States and other markets.

According to the U.S. Department of Agriculture, China’s cotton consumption in the current season is expected to be 8.9 million metric tons. This is a 24% increase over the last two seasons, driven in part by increased demand for consumer goods in the wake of the pandemic.

However, rising cotton prices are not the only major concern facing apparel brands. Last month, for example, Nike said it had lost 10 weeks of production since mid-July due to factory closures in Vietnam and Indonesia. This, coupled with transit times that have nearly doubled from pre-pandemic levels, has led executives to warn that demand is likely to outstrip supply over the next few quarters.

This pressure on the different parts of the production chain could lead to an increase in clothing prices.

You can access the UNGA resolution of 30 August 2021 declaring 7 October each year as World Cotton Day, at the proposal of Benin, Burkina Faso, Chad, Côte d’ Ivoire and Mali at the following link.

Image: vogue.com

Inditex maintains its leading position in the general ranking of companies and in the ranking of the Fashion sector.

Other companies in the fashion industry that stand out as companies with the best corporate reputation in Spain in 2021 are:

• Adidas, which reaches 57th place, after ranking 77th in 2020.
• Nike, which rises to 67th place, after ranking 79th in 2020.
• Mango, which is ranked 77th, after ranking 73rd in 2020.
• Ecoalf, which joins the list in 99th place.

In the cosmetics sector, L’Oreal (23rd), P&G (37th) and Unilever (75th) stand out.

Pablo Isla, chairman of the Inditex Group, has also stood out for yet another year as the second leader with the best reputation in Spain, behind Juan Roig, chairman of Mercadona, who heads the list. Amancio Ortega (Inditex) once again holds fourth place in this general ranking of leaders.

Javier Goyeneche, chairman and founder of Ecoalf, rises to 35th place from 54th and Marta Álvarez, chairwoman of El Corte Inglés, rises to 40th place from 70th.

Other leaders in the fashion industry who stand out in this list are: Isak Andic, co-founder, owner and president of Mango, who is placed and maintained at number 31; Víctor del Pozo, CEO of El Corte Inglés, who is placed at number 68; and Adriana Domínguez, executive president of the Adolfo Domínguez group, who is placed at number 94, entering the ranking this year.

In the 2021 sectoral ranking of companies, the 14 companies with the best corporate reputation in Spain are the following:

Source: Sectoral Ranking of Companies 2021, Merco. (*) companies that did not appear in the 2020 sector ranking.

Merco points out that, for the preparation of these lists, it carried out a study with more than 47,235 surveys, seven evaluations and 25 sources of information, verified through an independent review by KPMG. Merco also involved the participation of 1,110 executives from large companies, as well as 90 NGO managers and other opinion groups.

The main areas evaluated to determine a company’s reputation were ethics and corporate responsibility. However, innovation, the working environment, economic-financial results, and corporate social and environmental responsibility also stand out as the most important values for determining a company’s reputation.

You will find Merco’s report at the following link.

The first TikTok For You House opens on July 22 as a pop-up store designed in 372 m² of space on two floors of London’s Westfield shopping center. The store will remain open until August 8.

It is not about selling products, but rather unique experiences. The TikTok For You House will present trends born on the platform, which can be booked as real-life sessions.

The social platform describes TikTok For You as a “unique IRL experience” that aims to bring together the UK’s best TikTok talent across family, food, fashion, and consumer trends.
The overall experience combines the offline and online worlds for Westfield consumers.

“TikTok has become a cultural phenomenon,” says Harita Shah, UK marketing and creative, media, events and brand director for Europe at Unibail-Rodamco-Westfield. “Many of our visitors are inspired by it, whether it’s fashion trends, the latest home style influencers or ideas for food lovers. The physical space in Westfield offers shoppers the chance to experience TikTok and its most popular creators.”

The design of the showroom is based on the TikTok interface with its trending clips. Visitors will be able to interact with successful influencers and create their own mini-movies. To do so they can book sessions for £ 5 (€ 5.85) and learn from the influencers how content is made for TikTok.

Britain’s most successful TikTok creators such as teenager Kyle Thomas, comedian Ehiz Ufuah, Michelin-star chef Poppy O’Toole and freestyle footballers Jeremy Lynch and Ben Black will be taking part.

The centerpiece of the house will be the Living Room, where editing features will be showcased. The Kitchen will feature recipes and cooking, and the Dressing Room will feature fashion and beauty. In the Garden there will be any sports activities, as well as dance sessions. Information will also be given to parents on how to keep their children safe on the platform.

A recent report “How We Shop:What’s Changed “by Westfield Shopping Centre showed that Londoners’ desire for in-store experiences has increased from 48% to 52% since 2020. According to the report, consumers want to get out of their homes and back into real experiences. And nearly 20% of shoppers want more immersive digital experiences.

TikTok, Instagram and other social media channels have become increasingly influential among consumers in recent years when deciding where and what to buy. A physical space allows them to bring their digital platforms to new potential users. Shopping malls like Westfield see this as an opportunity to attract more visitors again after the Coronavirus-related drop in consumers.

In addition, to further enhance its online platform, TikTok recently announced that it will soon offer users the option to create videos up to three minutes long to make the app more attractive to influencers and creators.

f you are in London between July 22nd and August 8th, don’t miss this opportunity to live a unique experience.

You can book a workshop for creators at the TikTok For You House by clicking here.  And for general reservations click here.

The dress code is a set of internal guidelines that identify the way to dress to align the image of a company’s employees with the company’s philosophy and strengthen its professional image.

Lawyers are the best prescribers of law firms they can reinforce the confidence of their clients and generate trust in their potential clients. Although the dress code is also a tool for the lawyers themselves by helping them to enhance their personal brand image.

The smart casual trend has been consolidated in law firms after the pandemic, although it had already begun to be implemented in the legal sector a few years ago. This dress code leaves behind the tie, suit and heels and replaces them with formal and elegant but more comfortable clothing, without forgetting to wear a jacket or blazer.

Teleworking, the increased use of social networks by offices and professionals and the drastic reduction in the number of face-to-face meetings have allowed this dress code to be implemented more quickly.

In this article we highlight that:

“All firms should bear in mind that the dress code is an investment that generates value for the firm, by reinforcing the corporate culture and transmitting it through its best prescribers, which are the lawyers who are part of it.”

“The message conveyed is one of adaptation to change and closeness of the sector to its target public, but without affecting the quality, seriousness and professionalism characteristic of this sector”.

Read the full article here (pages 54 to 57)