The biggest chain of department stores in
Europa is said to be in the process of renegotiating the terms for loans with
different parties. El Corte Inglés is facing a difficult time: unemployment in
Spain has risen to 27.2%, the highest number in 37 years. That has its effect
on the chain: economic growth is shrinking and retail sales have dropped by 11%
in March, when compared to the previous year.
At the moment sources at El Corte Inglés and
Morgan Stanley do not want to confirm the reports officially, but the company did release a statement saying “the re-ordering of its debt was part of ordinary
activity in its financial area to give the company greater flexibility.”
Daniel Lacalle, portfolio manager at Ecofin
from London, calls the deal “sensible”. “The company may try to have its debt
guaranteed by assets such as its department stores, which are located in prime
locations and will be very attractive for investors – even if the Spanish
market continues to be tough”, he says to Bloomberg.
El Corte Inglés is the biggest employer of
Spain, with more than a 100,000 employees. The chain has 81 department stores
in Spain and two more in Portugal and it has 1.5 million visitors each day. It
is also the third largest chain in the world in terms of sales, after the
American chains Sears and Macy’s.