Lonia Textile Societythe Galician textile group that operates stores of the Purificación García and Carolina Herrera brands, steps on the accelerator in its progressive withdrawal in the centers of The English Court. During its 2023 fiscal year, which ended on February 28 of this year, the company undertook the closure of 61 points of sale located in these department stores, considering them “non-strategic”, as explained in the annual accounts that it has deposited in the Registry. Trade. There are 47 more than those that closed during the previous year.
After the adjustment, the textile company had 257 points of sale located in El Corte Inglés centers as of February 28. The distribution group chaired by Marta Álvarez has a commercial model that allows third-party brands to use, within its facilities, spaces so that they can present their offer in a practically autonomous way. The employees who serve in these corners, as they are called internally, are employees of these brands and not of El Corte Inglés, which also avoids possible inventory risks. A concession model that it has been developing for years, and in which the distribution group demands a guaranteed minimum return per square meter, regardless of the sales that these third-party brands generate. In its latest bond issue prospectus, the department store group mentioned this model, adding that “the relationship with external brands constitutes an important part of the business.”
In the case of Textil Lonia, the reduction has been accentuated in the last year, although the trend has been progressive for some time. In 2017, the firm had 372 points of sale of this type, which means that in the following six years it has closed 115 corners, almost a third. To reach these figures, it must be taken into account that Carolina Herrera and Purificación García are present in El Corte Inglés in several sections within the same store, such as men’s, women’s and accessories. That is, in the same large warehouse, there may be several corners. From the firm, they limit themselves to explaining that their decisions are made “thinking about the long term, and always with the help of their partners, including El Corte Inglés.”
The role that these play in Textil Lonia’s physical network is relevant. At the end of the last financial year, it had a total of 586 points of sale among all the formats and markets in which it operates. Of that figure, 354 were corners distributed between department stores of El Corte Inglés and the Mexican group Palacio de Hierro, of which 257 corresponded to those located in the former. That is, 44% of Textil Lonia’s global physical network was in El Corte Inglés stores. In the Palacio de Hierro centers, there has been no contraction.
The Galician textile company, which operates in around twenty markets, also had 132 of its own stores at the end of the year, 46 of them in Spain. Here it has also suffered setbacks, although to a lesser extent. The global number has been reduced by 15 establishments since 2017, while at the national level the decline has been 24. The group also has 100 franchises.
Textil Lonia concluded the last financial year with a turnover of 429.8 million euros, a figure 1% lower than the previous year, which its management report links to the aforementioned closures. 51% of that turnover was generated in America, where it has 192 points of sale. The US and Mexico are, after Spain, the countries where it has the largest number of workers, 231 and 252 respectively; and the two international markets where it makes the most money. Its profit before taxes in Mexico exceeded 13 million, while in the US it was 2.1.
The company’s capital is divided equally between four investors: Puig, owner of the Carolina Herrera brand and which licenses Textil Lonia to operate stores; and the three brothers Domínguez Fernández, Josefina, Javier and Jesús, each with a company in which they hold 25%.
