Fitch revises El Corte Ingles' outlook to positive, affirms at 'BBB-'
What: Fitch revises El Corte Ingles' outlook to positive from stable and affirms its BBB- rating, citing improved business performance and successful deleveraging efforts.
Why it is important: This rating action demonstrates how traditional department stores can strengthen their financial position through strategic transformation, combining operational improvements with disciplined financial management.
Fitch Ratings has upgraded El Corte Ingles' outlook to positive, while maintaining its BBB- rating. The retailer has shown impressive financial discipline, with EBITDAR net leverage expected to trend down to 2x by FY27. The company reported strong business performance in 1HFY25, achieving 3.6% like-for-like revenue growth and improving its EBITDA margin by 70 basis points to 7.5%. This success stems from growth across multiple segments, including fashion, beauty, home electronics, food, and travel. The rating agency particularly noted ECI's strategic focus on retail operations, enhanced digital capabilities, and the financial flexibility provided by its EUR15.5 billion real estate portfolio. Despite lower profitability than some sector peers, ECI's diverse business model and dominant market position in Spain provide stability and growth potential.
IADS Notes: El Corte Ingles' positive outlook revision in June 2025 reflects broader trends in department store transformation. The retailer's success in improving margins while maintaining market leadership aligns with recent industry developments, where successful retailers are balancing digital innovation with physical asset optimisation. This follows Selfridges' February 2025 strategic initiatives and parallels Harvey Nichols' transformation plan announced in February 2025 . The focus on operational efficiency while maintaining strong customer experience mirrors Fortnum & Mason's approach, which earned them recognition as the world's best department store in January 2025 . ECI's strategy of leveraging its real estate assets while investing in digital capabilities demonstrates how traditional department stores can successfully modernise their business models.
