Inditex shares tumble after founder’s daughter is named president – .

Inditex shares tumble after founder’s daughter is named president – .

Inditex, the world’s largest clothing retailer, has named its founder’s 37-year-old daughter as the company’s new chairman, in an attempt to dispel doubts about the succession but prompted a sell-off of shares.

Shares of the owner of Zara, whose market capitalization of 88 billion euros is the largest of any Spanish company, fell 6% in Madrid.

Marta Ortega, the daughter of Amancio Ortega, the 85-year-old man who controls around 60% of Inditex’s shares and is the richest man in Spain, will take the presidency on April 1.

She has worked for the group for 15 years, including on Zara branding, an area Inditex said she would continue to oversee.

” Doubts [about the succession] that existed no longer exist, ”said a person close to the company. “We now know what will be in place afterwards. “

But Tuesday’s announcement took the markets by surprise, even as the group said it marked the completion of a “process of generational transmission” that began in 2011, when Pablo Isla, the outgoing executive chairman, himself replaced Amancio Ortega.

“One of Amancio Ortega’s great successes is that it has professionalized the business and reduced the role of family,” said Lorenzo Bernaldo de Quirós, president of Freemarket, a Madrid-based consulting firm. “It’s a step backwards. “

The company said that, unlike Isla, Marta Ortega would not be executive chairman and that Inditex would adopt a more “Anglo-Saxon” corporate governance model.

Instead, the main executive role will be taken on by Oscar García Maceiras, general counsel and secretary of the board of Inditex, who will immediately assume the role of managing director.

At a press conference, he said that, rather than the personnel changes marking a shift in strategy, he would seek to “continue, deepen and develop” Inditex’s business model – which involves producing up to 65 000 new designs per year and a formidable logistical organization. which delivers the latest clothes to its stores at least twice a week.

The group will also set up a new management committee made up of historical leaders.

“Making this transition a reality is the culmination of my commitment to Inditex and Amancio Ortega,” said Isla, who will remain in office until March 31.

“We are doing it now because it is an optimal time,” he added at the press conference. “We are very strong, we have a well-defined strategy, fantastic teams in all areas. . . Obviously, we have been preparing for this transition for some time, in a discreet way, as we usually do in Inditex.

Marta Ortega said that she had “lived and breathed this business since my childhood. . . I always said that I would dedicate my life to building on my parents’ legacy.

Inditex, whose more than 6,600 outlets include the Massimo Dutti, Pull & Bear and Stradivarius brands, has rebounded from the pandemic, notably by stepping up its online sales, which are closely integrated with its bricks and mortar operation.

Its latest quarterly revenues broke 2019 records, at nearly € 7 billion.

Sales in local currencies between August 1 and September 9 were 22% higher than the corresponding period in 2020 and 9% higher than the equivalent period in 2019, he said in an update. day in September.


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