Amsterdam - It’s been just over a year since European fashion retailer Tendam, formerly known as Grupo Cortefiel, announced a change of name as part of the group’s ongoing strategic plan to address the future challenges of internationalisation, growth and digitisation.
In the past two years, since the announcement of its restructuring plans, the group, which owns brands Pedro del Hierro, Cortefiel, Springfield, Women’secret, and Fifty, has managed to cut its debt. In the first nine months of the financial year ended 30 November 2018, the group returned to profitability, with pre-tax profit rising to 43.4 million euros (49.5 million dollars) against losses of 13 million euros the prior year.
FashionUnited sat down with the general manager of Tendam franchise, Antonis Kyprianou, to discuss the group’s performance since the initiation of its strategic plan three years ago; its new cross-brand click-and-collect strategy; and its future expansion plans.
Antonis Kyprianou, general manager, franchising at Tendam. Photo courtesy of the group.
It’s been a year since Tendam announced its new group name as part of its updated strategic plan. How successful has the plan been so far?
We think we are making great progress. I can’t talk in too much detail about our projects, but we are on track with the actions we have and we are moving with a very clear plan - we know what we need to do for this year and next year and so on. We have a very clear 5-year plan for several projects that will support our growth in terms of technology and e-commerce in order to grow our business.
We are looking to move faster and be more precise in what we do. As you can hear now at the World Retail Congress this year everybody is talking about the speed of things and how you engage with the customer. That’s important for us.
Could you tell me a bit about the cross-brand click-and-collect strategy announced in April. Has it been a success?
It is doing very well. The omnichannel strategy means shoppers can have items bought online from one brand delivered to the store of another brand which is closer or more convenient. Cortefiel doesn’t have as many stores as Springfield or Women’secret, for example, so we are using those larger stores to serve customers of Cortefiel in locations and cities where we don't have the stores.
Will that strategy be expanded?
Yes absolutely. It's in our immediate plans and we are moving quite fast on it. Once we test something in the company and we know it's working we will push to have it done immediately.
Online sales rose by 26.7 percent across all brands between March and November 2018. Is online a key focus at the moment?
E-commerce is very important to us. If you go back around 3 years ago you will see that we were growing almost 100 percent but we were losing money in e-commerce. Now we have seen a big turnaround through the way we manage our e-commerce. We are growing on both the top line and the bottom line and it's very healthy and very profitable. We believe we will continue to grow in double digits and we will continue in this direction.
How difficult is it to balance your priorities between brick-and-mortar and e-commerce?
You have to find a balance between the two. You balance it with different technologies. For example we have implemented a scheme where we have iPads in our stores so we promote sales through brick-and-mortar stores when stock is not available. I wouldn't say that it is a cannibalisation; it is just a continuation. You need to link both the brick-and-mortar and e-commerce and you need to make sure they’re on the same path. Our goal is to fine-tune our network of stores as the market changes. Of course some locations are less important so you might need to close and relocate to a more active area but we are very active in our brick-and-mortar networks in Spain and in Portugal among other areas.
So are you focusing brick-and-mortar growth in your strong markets like Spain and Portugal?
No. We are going to continue focusing on international as well. You have a limited capacity to grow, so we are equally focusing on growing our business internationally both in terms of brick-and-mortar and e-commerce.
Photo credit: Cortefiel, Facebook
The retail industry is less siloed than it once was - retailers are more aware of what’s going on in the industry around them. Are there any things other retailers are doing you’re particularly interested in?
We are always evaluating the different ideas like everyone else does, it's very natural. If you are not measuring your competition and their actions then you're out of space because you're not in touch with reality. You need a point of reference, so in that respect yes we are trying to capitalise on some ideas and create our own ideas to take them even further. By networking for example here at World Retail Congress it is one of the discussions that we have between us and different suppliers.
Sustainability is something everyone's talking about. What does it mean to Tendam?
Sustainability is one of the directions that we are really driving. We are not forced to do this, but it is part of our ethical direction as a company and it always has been. I think it's really part of our DNA. Sustainability has become bigger in the last 2 or 3 years but in our case we started it a long time ago and no one can be moving fast if they don’t believe in sustainability.
Photo credit: Pedro del Hierro, Facebook
How is the South American market doing?
South America is doing quite well. It's been growing for the last three years and we are growing our percentage and our presence in the market. We are in a good number of countries with the exception of a few. In terms of big markets we are not in Brazil and we are not in Argentina.
We have continuous expansion plans in South American. We are investing there and we are going to extend our presence also through e-commerce in different platforms and expand with more stores and with the existing partner that we have.
Are there any markets that you're particularly interested in?
We treat every region in a different way because every region has its different parameters and different characteristics, so it isn't black and white. Every case needs to be studied very carefully.
Africa is a great interest for our company. It is an important continent - it is one of the most highly populated continents and is always developing. At the moment we have a presence all over North Africa: We are in Ghana, we have opened in Kenya and now we are in Angola in a big way and we are investing in certain other markets that we are targeting this year to open. But it’s challenging.
It’s challenging because it's not like in the European Union where you can develop a strategy and formula of how you’re going to work with the countries - which will more or less apply to them all the same. In Africa, it's a completely different game from country to country. When you enter into a market you have to be very sure about your decision. You can’t treat the country opportunistically - you have to think in the long-term. This is what possibly differentiates us from the competition because we are very committed to every market we go to - whether we are in Malta or India, Mexico or Russia. For us, once we decide to engage with the market and engage with the population of the country - we are in. That’s an important component of our philosophy of how we treat different markets. We treat the markets with the respect they deserve.
Photo credit: Women'secret, Facebook
Are there any challenges you're facing as a company or in the industry as a whole?
Challenges as a group are different in different areas, but if I’m just focusing on international - which I think is a very important area for any company's growth - in order to be successful in any new market you enter, you need to be very focused in finding the right partner. You need to have partners who are aligned with you in order to develop your brand. In our case we don’t want to just appoint anyone.
So how do you make sure you find the right partner?
We investigate the market, we speak with people. We have our process of evaluation of the market. And we will not open if we don't find a partner who fits the profile, and one that we believe - from past experience - is suitable for us. That’s a big challenge. With the continuous challenges that we have you need to be fast in order to serve the market in terms of adaptations. You need to be alert in what to do as a company, to bring the feedback to the brand and see what is needed in the different regions to fulfill the demands in the different markets.
What are Tendam's plans for the next 5 to 10 years?
Retail is always exciting and now it's even more exciting because it's becoming faster and faster. I think we are going to see more emerging markets growing more quickly. Also, another thing that will be exciting is to see how e-commerce is going to evolve in new markets and how we as an organisation are going to manage our e-commerce in the different parts of the world because it changes in every country. We are also seeing the influence the internet and social media has on the industry so I believe that this is going to be very exciting to see how that will develop in markets like Africa for example.
Main article photo credit: Springfield, Facebook