Tom Tailor FY16 sales rise 1.3 percent boosted by 'RESET' program
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Business
The Tom Tailor Group has said that it was able to achieve its forecast for the fiscal year 2016 with a Group EBITDA amounting to 10.3 million euros (10.8 million dollars) and an increase in sales of 1.3 percent to 968.5 million euros (1,021 million dollars). The company also added that it has realized the first positive effects from the ‘RESET’ cost-reduction and efficiency program.
"We are gradually shedding ourselves of the troubled past. This was associated with financial cuts in 2016, but we have already emerged out of the trough. The first positive impacts have already become tangible in the fourth quarter. This is evidenced by the slight improvement of the gross profit margin at Tom Tailor and Bonita, and the adjusted cost structure," said Heiko Schäfer, interim CEO and COO of Tom Tailor Holding in a statement.
Tom Tailor initiates cost cutting measures for growth
As a part of the company’s cost and process optimization program launched by the new executive board in October 2016, during the fourth quarter, the Group pulled back business from South Africa and either started or already completed around 250 of approximately 300 planned branch closures.
Additionally, the company discontinued Tom Tailor Polo Team and Tom Tailor Contemporary brands and in the summer of 2017, it plans to pull the Bonita Men brand out of the market. In 2017, the group will also withdraw from China, the USA, and largely from France.
In line with expectations, the loss for the year amounts to around 73 million euros (76 million dollars) pre-audit, which the company said, includes one-off expenses amounting to 80.9 million euros (85 million dollars) for the RESET measures.
The umbrella brand Tom Tailor achieved growth of 5.6 percent to 665.6 million euros (701 million dollars) with sales through its own stores and wholesale partners. The umbrella brand Bonita contributed 303 million euros (319 million dollars) to group sales.
Summary- Group EBITDA amounted to 10.3 million euros for the year.
- To drive growth, Tom Tailor plans to exit from countries such as China, the USA and France this year.
Picture:Tom Tailor