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ECONOMY

Spain’s flagship department store El Corte Inglés posts record losses

Spain's venerable department store group El Corte Inglés, a barometer of the Spanish economy, reported Friday record annual losses due to pandemic lockdowns and a collapse in tourism.

Spain's flagship department store El Corte Inglés posts record losses
El Corte Inglés. Photo: GABRIEL BOUYS / AFP

One of Spain’s biggest private employers, the company posted a net loss of €2.9 billion ($3.5 billion) in the 12 months to the end of February, compared with a net profit of €310 million in the same period a year earlier.

If massive write-downs of €2.5 billion are excluded, the retailer said its net loss would total €445 million owing to “restrictions imposed due to Covid-19”.

Spain in mid-March 2020 imposed one of the world’s strictest coronavirus lockdowns with people ordered to stay home except to buy food,medicine or to seek medical care. The lockdown measures were only fully removed at the end of June.

“This result is mainly due to the cessation of much of its activity during the lockdown…as well as to the total absence of tourism, both national and international,” the company said in a statement.

El Corte Inglés in February announced a plan to cut between 3,000 and 3,500 jobs through voluntary departures.

Created in 1940 in Madrid, the family-run business swallowed its only other department store competitor in Spain, Galerias Preciados, in 1995.

It has pushed into all areas of Spanish life, selling everything from designer fashion, televisions, car insurance, kitchens, package holidays and hearing aids.

The privately-owned firm owns swathes of property in prime Spanish retail locations as it operates department stores in the centre of virtually every major Spanish city.

Spain’s economy contracted sharply by 10.8 percent in 2020, one of the worst performers in the eurozone, with its key tourism sector battered by the pandemic travel restrictions.

The government expects the economy will expand by 6.5 percent in 2021.

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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