Family businesses make a sizeable contribution to the Spanish economy, which, following the 2008 financial crisis, is still struggling with high debt and a falling population. Among the most publicised family firms are El Corte Inglés, Europe’s biggest department store, and Santander, the largest bank on the Continent, which together generate 2.6% of the country’s GDP.
According to a 2002 study from Barcelona’s IESE Business School, the number of family businesses featuring in the country’s largest 1,000 companies has dropped by nearly 20% in the past three decades. A significant share of business owner are expected to retire over the next five years, and it is likely succession will remain a challenge for family businesses. Only a quarter of Spanish family businesses make it to the second generation, just below the 30% global average estimated by the Family Business Institute.
The IESE study suggests that the decline in large family businesses can be attributed to the lack of government support. There is no legal definition for family business in the country, and nearly two-thirds of family businesses believe policymakers don’t fully understand their needs.
While large family businesses may be falling from the top ranks of Spanish business, 85% of companies are categorised as being family-owned, accounting for 70% of Spain’s GDP, according to the Family Firm Institute. Whether these companies will be able to grow into the family business giants of tomorrow remains to be seen. Exports have risen, but local consumer demand is paralysed, making it difficult for small, domestically-focused businesses to thrive.
Cut-price consumer brands have been able to buck this trend. Mercadona, for example, the country’s largest supermarket chain, posted profits of €515 million in 2013. On the other hand, El Corte Inglés, which targets middle-class shoppers, has struggled through Spain’s economic woes. Between 2007 and 2012 its net profit dropped from €716 million to €210 million.
Businesses that continue to do well include many internationally recognised consumer brands. Amancio Ortega Gaona who founded fashion empire Inditex, best known for its fashion chain Zara, with his ex wife, the late Rosalía Mera, is the wealthiest person in Spain. Ortega’s current estimated wealth is $65.6 billion (€51.9 billion). Mango is another family-owned fashion empire headquartered in the country.
The Osborne Group, one of Spain’s oldest producers of wine and pork products, generates 80% of its revenues from Spain alone, but is trying to reach out to the Chinese markets to weather the country’s anaemic domestic spending. In July, it sold a 20% stake to Shanghai investor Fosun International – the first time anyone outside the family has bought into the company.