Daughter of the founder of Inditex as president of the company, new CEO appointed

MADRID, Nov. 30 (Reuters) – Marta Ortega, daughter of the founder of Spanish fashion retailer Inditex (ITX.MC), will replace President Pablo Isla, who has led the company’s global expansion for more than a decade, in a succession that some analysts have called premature.

Ortega, 37, takes over the chairmanship of the group that owns the Zara brand in April with a new chief executive, the final step in the handover to a new generation that began ten years ago, the company said.

Shares of Spain’s largest listed company were down 5.8% at 1:00 p.m. GMT.

Isla said on a video conference that now is the right time for the change thanks to the company’s strong position, with second-quarter sales exceeding pre-pandemic levels in 2019.

“These changes that we are announcing today are very well thought out changes, which are part of a process within the company and we understand that the time has come to take this next step,” said Isla.

“With the changes … we are convinced that the company will continue to grow successfully”, he added during a virtual briefing where he was accompanied by the new CEO Oscar Garcia Maceiras but not by Marta Ortega elle -same.

Isla dismissed Tuesday’s fall in stocks as a short-term decision.

He succeeded Amancio Ortega, now 85, as president in 2011 after six years as vice-president.

Under Isla, Inditex’s share price has increased eightfold and its market value has skyrocketed to nearly 93 billion euros ($ 106 billion), while over the same period , shares of its main rival H&M (HMb.ST) climbed about 50%.

Most brokers said Ortega was her father’s natural successor, but said she was taking the lead faster than expected, with a young CEO with little retail experience.

Oscar Garcia Maceiras, who became general counsel and secretary of the board in March, succeeds Carlos Crespo, who spent two years as CEO and will remain COO.

‘A LOT TO PROVE’

“We believe the changes are bad news for Inditex,” Spanish investment firm Alantra said. “We would have expected a smoother and smoother transition period, with Isla supervising in a non-executive role.”

Broker Kepler said the reshuffle was “moderately negative,” adding: “Marta Ortega and CEO Oscar Maceiras have a lot to prove when it comes to their ability to lead this big monster in the midst of the COVID crisis.”

But other analysts said Inditex, which performed well during the pandemic, was unlikely to see a change in strategy as part of the changes and was relatively well placed to deal with supply chain issues. global.

“Given the orderly transfer process and the group’s long-term strategy, these changes are unlikely to offer the possibility of a significant change in strategic direction,” wrote Adam Cochrane, analyst at Deutsche Bank.

Ortega, known for her passion for equestrianism, has worked for the company for 15 years, starting as an assistant at one of the company’s cheapest retail outlets, Bershka. Isla said she will continue to oversee Zara’s image and fashion.

Ortega said in a statement: “I have always said that I will dedicate my life to building on the legacy of my parents, looking to the future but learning from the past and serving the company, our shareholders. and our customers. “

Amancio Ortega, the 11th richest man in the world with $ 77 billion according to Forbes, still owns 59.29% of Inditex, while Sandra Ortega, daughter of his first marriage, is the second shareholder with 5.05%, according to data from Refinitiv. ($ 1 = 0.8803 euros)

Report by Inti Landauro and Jesús Aguado; Additional reporting by Corina Pons and Nathan Allen; Editing by Andrei Khalip and Edmund Blair

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