Sociedad Textil Lonia, owner of Purificación García and Carolina Herrera, has recorded a considerable decrease in profits in its last fiscal year. Faced with this situation, the company has decided to close stores in locations considered not very strategic, including those located in the department stores of El Corte Inglés.
The company explained to Fashion Network magazine that, in the first months of 2023, it recorded a negative impact on its markets due to the “general slowdown in the economy”. It also acknowledged that the company’s costs were increasing due to inflationary pressures.
During the 2022-2023 financial year, Textil Lonia has closed 61 outlets in El Corte Inglés buildings. The fashion company had around 600 stores, more than 44% in corners of these shopping centers. Terminating relations with the Spanish department store chain therefore represents a change in its business model.
Focus on the Americas
According to Business People, the firm will bet on strengthening its network of own stores and improving its digital presence, as luxury firms such as Hermès or Louis Vuitton have done, both with strong e-commerce platforms and personalized points of sale in strategic streets.
Carolina Herrera’s owners perceive a higher sales volume in the American market, which is why one of the group’s main objectives is to grow in this continent. Especially in the United States and Mexico, the countries where it sells the most internationally.