FNAC is experiencing difficult times in Spain. According to the data that has just been made public, the Spanish subsidiary of the French group has suffered a 73% drop in profit last year. Taking into account that 2020 is conditioned by the coronavirus crisis, everything indicates that the company will incur losses this year. The low weight of online sales and the rise of competitors such as Amazon, PC Components or MediaMarkt are weighing down the accounts of the chain of stores.
FNAC was the first distributor in Europe of technical and cultural products, and it also arrived in Spain 25 years ago, opening the first store in Madrid on the well-known Preciados street. Since then, the company has been opening stores in different cities in Spain with a positive result since between 2012 and 2018 the company registered a profit of between 4 and 5 million euros.
Last year it suffered an unprecedented crash obtaining the lowest profit in the last 12 years. It barely earned 1.47 million euros, which represents a reduction of more than 70% compared to the 5.5 million it earned precisely in 2018. According to Cinco Días, the significant decrease is due to operational issues but the truth is that the The brand has lost the trail of rivals such as Amazon, PC Componentes, MediaMarkt or El Corte Inglés, which clearly lead the online sales in Spain, the segment that has been growing the most in recent years and that has most held the accounts of companies with the impact of COVID-19.
Closing of stores in sight?
It would not be unreasonable to think that in the coming months the company could close a physical storeIn fact, it is something he has already done in Seville. In 2019, FNAC incurred a significant increase in operating costs at the same time that its sales stagnated compared to 2018, barely improving by 0.6%, reaching 378 million euros. In 2020 the situation is worsening due to the impact of the coronavirus, shoppers go less and less to physical stores and, in addition, the absence of concerts weighs on the Ticket Sales at FNAC outlets that attracted a large audience.
Analyzing the data by segment, its stores reported 355.5 million euros, while its insurance, services or technical assistance division fell 7% with a turnover of just over 22 million euros. Its online sales managed to climb 18% but the company has not detailed the weight they represent on the total turnover that we presume will be low compared to its rivals already selling more online than in physical points of sale.
Despite having been in Spain for 25 years, FNAC has not been able to adapt to the world of the Internet. Little online presence, higher prices than its competitors and above all thousands of complaints about its service that generate distrust of its customers. At TrustPilot the company has a terrible reputation with 92% very negative opinions.
The complaints mainly focus on Customer Support and in the after sales service, the partners are also being very critical of the new policy adopted by the company led by Marcos Ruao charging for example the Shipping costs. The reality is that a complicated picture is presented for which it was a leader in the distribution of cultural products a few years ago.