Billionaires Juan Roig and Hortensia Herrero, the husband-and-wife team that controls Mercadona SA, Spain’s largest supermarket chain, created thousands of jobs last year as their country’s economy crumbled

Spanish Billionaires Hire 4,000 Amid Country’s Job Slump

Billionaires Juan Roig and Hortensia Herrero, the husband-and-wife team that controls Mercadona SA, Spain’s largest supermarket chain, created thousands of jobs last year as their country’s economy crumbled. Revenue at the closely held operation rose 7 percent to 19.1 billion euros ($24.5 billion) in 2012, according to its annual report, as demand for its low-priced, private-label goods lured cash-strapped Spanish shoppers. Net income also jumped 7 percent to 508 million euros, a performance that helped allow the company to hire 4,000 new workers. Roig, the country’s fourth-richest person and a well-known figure in the Spanish press for his economic commentary and pronouncements, controls 51 percent of Mercadona. He has a $4.5 billion fortune, according to the Bloomberg Billionaires Index.

“Mercadona, under the Roigs’ instruction, has posted extraordinary growth over the last 10 years,” said David Bain, the London-based head of research at Campden Wealth, a networking community for the world’s wealthiest family businesses. “Roig is a big believer in the family business model, and is strict about his family actually contributing rather than providing a nice place to hang out in a high-paying non-job.” Herrero, 62, is vice president of the Valencia, Spain-based company, which commands 14 percent of all food retail space in the country, according to the annual report. She controls a 28 percent stake in the company and has a net worth of at least $2.6 billion.The operation’s expansion comes amid a 21-month long recession in Spain that has pushed unemployment to 27 percent, its highest level in almost four decades. The country’s economy is expected to contract by 1.6 percent in 2013, according to the median of 27 economists’ forecasts surveyed by Bloomberg.

Wealth Ranking

Herrero has never appeared individually on an international wealth ranking. She has been a billionaire since at least 2006, according to the Bloomberg ranking.

The company accounted for 19 percent of Spain’s total grocery retail sales by value in 2012, according to a report by London-based researcher Euromonitor International, and operates no stores outside of its domestic market.

“We can’t conquer the foreign market if we haven’t reinforced our base first,” Roig said at a press conference in March.

Mercadona is valued at $8.6 billion, according to data compiled by Bloomberg, based on the average enterprise value-to-earnings before interest, taxes, depreciation and amortization and price-to-earnings multiples of three publicly traded peers: Bradford, England-based WM Morrison Supermarkets Plc (MRW), Madrid-based Distribuidora Internacional de Alimentacion SA (DIA) and Saint-Etienne, France-based Casino Guichard Perrachon SA (CO) (CO).

Enterprise value is defined as market capitalization plus total debt minus cash.

Top Grocer

A Mercadona spokeswoman, who asked not to be identified citing company policy, disputed the Bloomberg valuation.

“According to the last purchase of shares between shareholders in 2012, the economic valuation of the company is 3.1 billion euros,” she said in an e-mail. “This is the value given by the families that own 100 percent of Mercadona.”

The spokeswoman confirmed Roig and Herrero’s stakes in the company, which are held through two Valencia-based holding entities, according to Orbis, a database of company information published by Bureau van Dijk.

Annual Dividend

The couple has collected more than $400 million in dividends since 2006. Mercadona distributes 10 percent of its pretax profit to shareholders each year, according to the spokeswoman, who said the dividend has been in place since the company was founded.

Roig and Herrero met while studying economics at the University of Valencia. In 1981, the couple and three of Roig’s siblings bought a chain of eight grocery stores from his father. The siblings, along with Herrero, expanded the business, according to the annual report.

The group focused on modernizing and expanding the operation, adding innovations such as bar code scanners and credit cards for customers. They also built the first automated distribution center in Spain, which, along with the acquisition of a Madrid-based competitor, helped the chain expand.

Roig became the company’s majority owner in 1991, when he paid 3.9 billion Spanish pesetas ($36 million) for most of his siblings’ stakes, according to Manuel Mira, an Alicante, Spain-based author who published a biography of Roig in April.

The remainder of Mercadona is held by minority investors, including Roig’s brother Fernando, who holds 9 percent, according to Mira.

‘Four Daughters’

Roig has attempted to improve working conditions for his employees. In 1995, he began to give all Mercadona employees full-time contracts, a process that was completed four years later.

“They’re very good with corporate responsibility,” Campden Wealth’s Bain said by e-mail. “They have one of the best labor-to-management relations of any Spanish business, giving their employees excellent benefits.”

Herrero, who rarely gives interviews, controls an eponymous foundation that supports education, environmental protection and the restoration of artistic and cultural heritage.

The organization has no website, and was ranked at the bottom in a survey published by Madrid-based Fundacion Compromiso & Transparencia in March that measured the transparency of 25 of Spain’s family-controlled foundations.

Still, her husband has praised her for the role she has played building Mercadona.

“I want to share this prize because she helped me,” Roig said in a 2010 acceptance speech for the Prince Felipe Prize for Business Excellence. “First, to be a good student, to improve Mercadona day after day with her many tips and opinions, and also because she gave me the best gift a person could ever receive: four marvelous daughters.”

To contact the reporter on this story: Tom Metcalf in London at


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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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