Tendam's sales down 34.5% but recovery continues in 2021
Spanish fashion group Tendam, owner of Cortefiel, Pedro del Hierro, Springfield, Women'secret, Hoss Intropia, High Spirits, Slowlove and Fifty, has been hit hard by the pandemic, and is looking to recover in the course of this year. In the last fiscal year, from March 1 2020 to February 28 2021, the group recorded losses for €109.5 million.
According to the results published by Tendam on Thursday June 24, in the period in question the group’s sales fell by 34.5%, down to €777.2 million. A slump that the group chiefly ascribed to the crisis triggered by the pandemic, and the ensuing restrictions that have forced store closures or capacity limitations in most of the markets in which Tendam operates. Comparable sales fell instead by 17.7%.
As for other industry players, the e-tail channel became the star of the show for Tendam, acting as a lifeline to help weather the storm. The group’s online revenue increased by 58.9%, to €121.7 million, accounting for more than 20% of Tendam's total revenue. A result that was in line with Tendam's forecasts, since the group is aiming to multiply e-tail sales by a factor of three over the next three years.
EBITDA for the group, currently controlled by the CVC and Pai investment funds, was positive to the tune of €145.8 million. Despite the decline in revenue, Tendam underlined that “thanks to the measures we adopted,” it was possible to mitigate the fall in free cash flow to minus €57.4 million, owing also to the €12.3 million improvement in working capital achieved through inventory control, reduced spending and reduced investment in capital goods, while investments on Tendam’s digital strategy were prioritised.
On the road to recovery
“In addition to its social impact, the pandemic gave us the opportunity to carry out an in-depth reflection on our industry, our business and our assets, and on how to forge ahead in future, driving not only a strategic acceleration but also a radical transformation of our business model,” said Jaume Miquel, president and CEO of Tendam, indicating that he expects “the group’s results to be on par with 2019 at the latest by the first half of 2022.”
With regard to the current financial year, Tendam's top executive pointed out that its first few months are turning out to be “very positive,” especially May and June, thanks to the progressive lifting of the restrictions requiring store closures. Online sales continue to increase “robustly.” In Q1 2021, they recorded a 90% rise over 2019, and a 40% rise over 2020.
To boost this growth, the group has worked on the ‘Tendam 5.0 Plan’, with the aim of “playing a leading role in future by relying on an open omni-channel ecosystem,” underpinned by the current 140 million visitors to the group's websites, the 220 million visits to its physical store network and the 27.7 million members of the group’s various loyalty programmes. It is a “model that strives for a perfect connection between the digital and the physical” and that welds together the group's own brands, newly created brands and third-party brands.
“We are convinced that, in the short and medium term, the market will offer growth opportunities deriving from released market share and digitalisation. We firmly believe that, because of the ongoing transformation process, Tendam is in an excellent position to exploit these opportunities,” said Miquel.
With regard to the workforce, Tendam supplemented state grants for furloughed staff up to 100% of wages and, as of today, the group has no employee on furlough. In addition, during the past financial year, the company negotiated and approved its second gender equality plan. Currently, 84% of Tendam staff are women, and 59% of them work in managerial roles.
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