Inditex gets a new CEO – but don’t worry, Pablo Isla isn’t going anywhere!
Spanish fast-fashion giant Inditex has long been in possession of an important advantage in the business world: a superstar CEO, Pablo Isla. Now, he’s making room at the top for someone else. Inditex’s long-running chief operating officer, Carlos Crespo, is being appointed the company’s CEO. This promotion seems tied in to Inditex’s current strategic goals of digitalisation and sustainability – and investors shouldn’t worry. Isla will remain at Inditex as executive chairman, where he plans to occupy an overall leadership role.
Inditex’s share price has appreciated by 11% so far this year
Source: Yahoo Finance
In a statement, Mr. Isla remarked on how important Mr. Crespo’s new role would be “at a time marked by Inditex’s strategic digital transformation and far-reaching commitment to sustainability”. The context here is that Mr. Crespo has been overseeing the company’s tech, IT and sustainability efforts (so far, a huge success).
Citi Research analyst Adam Cochrane sees these strategies as the current driver for the business, writing in a note: “[This] reflects the importance of digital and sustainability to the business model. As the store estate is being rationalised and net new space starting to reduce the importance of digital to drive sales growth is now paramount. Sustainability is the next wave for fashion retailers to address.” Hence, it is not hard to see why their champion would find himself suddenly appointed to a more prominent role in the business.
Anne Critchlow, retail analyst at Societe Generale sought to downplay fears about Isla taking a backseat: “This perhaps doesn’t change things as much as it might at first appear — it’s a strengthening of management, not a direct replacement as such. This is not about succession planning — Pablo isn’t going anywhere. Pablo Isla will continue to present the company’s results to the market”.
Dominion holds Inditex in its Global Trends Luxury Fund.
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