El Corte Inglés tightens its belt: creates purchasing central to reduce 20% of expenses

El Corte Inglés tightens its belt. The department store company from Spain, headed by Jesús Nuño de la Rosa, has released a savings plan that includes the creation of a purchasing centre to manage the hiring of suppliers. The group’s goal is to reduce expenses in a 20%.

The company has created a central for purchases that will manage the revision of expenses in telephonic services, electricity, gas, transport, security, cleaning services and maintenance, among many others, which entail an annual expense of 1.4 billion euros, according to El Confidencial.

During the next few weeks, Nuño de la Rosa will designate a specific controller to renegotiate all these external services and will conduct an auction to sell it to the highest bidder. This new figure will directly report to the chief financial officer, Javier Fernández Arias Ambrosini.

The new strategy will modify the group’s relationships with companies such as Telefónica or Endesa

With this move, El Corte Inglés will apply for services the same strategy it uses for retail, as the group already owns a purchasing central that negotiates the sourcing of several products offered in its stores.

The new strategy will modify the relationships the group has with other Spanish companies such as Telefónica, Endesa, Iberdrola or Mega2, the security company controlled by Juan Carlos Fernández Cernuda.

The department stores company registered a volume of business of 7.58 billion euros during the first six months of the current fiscal year, a 0.4% more than in the same period last year. The group raised a 4.4% its gross operating profit (EBITDA), which stood at 335 million euros.