May 23, 2019
By Sonya Dowsett
MADRID (Reuters) – The world’s biggest clothing retailer Inditex said on Thursday it would split its current dual role of chief executive and chairman, leaving Pablo Isla leading the company as chairman and appointing COO Carlos Crespo as the new CEO.
The appointment reflected the importance of technology at Inditex, a company source said, given the owner of Zara, Massimo Dutti and Bershka is seeking to integrate online sales with its store network by focusing on large stores where customers might try on items to buy later online.
Although Inditex is seen by investors as one of the best-performing apparel retailers, its earnings growth has come under pressure as it faces increasing competition and as online retailing makes shoppers more savvy trawling for bargains.
As chief operating officer, Crespo oversaw the integration of the company’s online and physical stores with features like “click and collect” and the ability of customers to check online to see if an item was available in a nearby store.
Isla, who until now has held the positions of both chairman and CEO, will stay as executive chairman. Crespo will work with Isla to define overall company strategy, the company said.
“Most importantly for investors in our view is that Pablo Isla remains fully committed to the business as executive chairman and Carlos Crespo will be reporting into him,” said Adam Cochrane, analyst at Citi.
“The overall strategy and execution will be unchanged.”
Inditex had separate roles for chairman and chief executive until 2011 when then-CEO Isla took over as chairman from founder Amancio Ortega. Ortega, 83, still plays an active role in the company.
The company disappointed the market in March by missing full-year earnings expectations, held back by flat margins and a stronger euro which curbed sales growth at Zara and its other brands.
Shares closed at 24.7 euros on Thursday, giving the company a market value of 77.25 billion euros. Shares have risen 13 percent in the year to date.
Crespo, 48, has been with Inditex for 18 years and will be responsible for technology, IT security, logistics and transportation amongst other areas in his new role.
“Carlos Crespo’s track record within the group and his responsibilities as COO made this promotion the natural next step,” Inditex said in a statement.
The appointment will take effect in July, once approved by the board and shareholders.
(Reporting by Sonya Dowsett, editing by David Evans)