Tom Tailor 2019 revenues decline, expects further drop amid COVID-19 outbreak

According to preliminary, unaudited results, Tom Tailor Holding SE reported revenue decline of 4.8 percent to 803.1 million euros (882 million dollars) due to continued decrease in revenue at Bonita amid the difficult market situation as well as further planned store closures in this segment. The company said in a statement that revenue generated by the Tom Tailor brand rose slightly year on year, by 0.4 percent to 620.3 million euros (681.7 million dollars). The company anticipates large revenue decline across markets in 2020 due to the continuous spread of coronavirus and its negative impact on the business.

“Fiscal 2019 was in line with our expectations. We were able to grow the Tom Tailor brand once again and we returned in particular to an increase in revenue in our own retail business for the first time in three years. At the same time, we succeeded both in slowing the decline in revenue and improving the income situation at Bonita,” said Dr Gernot Lenz, CEO of Tom Tailor Holding SE.

Tom Tailor retail segment revenues return to growth

The company said, revenue of the Tom Tailor retail segment increased due to a positive trend in stationary retail as well as in e-commerce, with growth of 2.9 percent to 291.1 million euros (319.5 million dollars), while revenue in e-commerce was up 6.5 percent to 50.4 million euros (55.3 million dollars). The company’s like-for-like sales also increased by 0.9 percent compared to the previous year.

The company added that gross profit margin within the group, at 57.9 percent, was approximately on a par with the previous year’s level of 58.1 percent. Reported group EBITDA was 98.5 million euros (108.2 million dollars) compared to the previous year’s figure of 25.7 million euros, while adjusted group EBITDA was 33.7 million euros (37 million dollars). The Tom Tailor brand’s adjusted EBITDA of 56.5 million euros (62 million dollars), were below the previous year’s level of 64 million euros, while the adjusted EBITDA margin amounted to 9.1 percent, compared to 10.3 percent in fiscal 2018.

Revenue at the Tom Tailor wholesale segment dropped in 2019 by 1.8 percent to 329.2 million euros (430.6 million dollars). Also adjusted EBITDA decreased significantly to 44.8 million euros (49.2 million dollars).

In fiscal 2019, the Bonita segment posted a decline of 19 percent in revenue to 182.8 million euros (200.6 million dollars). The segment’s gross profit margin improved by 1.6 percentage points to 63.7 percent, while adjusted EBITDA improved to negative 22.7 million euros compared to negative 38.2 million euros in 2018.

Corona crisis impact on Tom Tailor’s fiscal 2020 performance

Tom Tailor Group stores are closed in most European markets due to the continuing spread of the coronavirus. The company said, ongoing business with large customers (wholesale) is also considerably impacted by the restrictions imposed by the respective European governments. While online retail and wholesale offerings continue, the company said that the online activities do not generate a large enough share of overall revenue, so they cannot compensate for the losses in revenue in the company’s own retail and wholesale businesses.

Due to the worsening of market conditions in almost all markets relevant to the Tom Tailor Group and the associated risks for the financing and liquidity situation of the group, Tom Tailor said, the executive board rates short-term and medium-term liquidity planning as significantly risky, which include the risk of non-fulfilment of key lending indicators as well as the risk of liquidity bottlenecks.

“The corona pandemic has led to a dramatic deterioration in market conditions in recent weeks in all of our markets. Therefore, we are putting all our efforts into taking countermeasures to minimise the economic damage for the group, added Christian Werner, CFO of Tom Tailor Holding SE.

Picture:Tom Tailor newsroom


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