Published at 10:11 am
TENDAM’s sales grew by 3.6%, its like-for-like sales by 2.5%, and the Group’s EBITDA rose by 6.6% in the third quarter of 2019/20
Tendam Brands, the parent company of the Tendam Group, one of Europe’s leading fashion retailers operating in the specialised chain store segment through the Cortefiel, Pedro del Hierro, Springfield, Women’secret and Fifty brands, has announced today its results for the period from 01 September 2019 to 30 November 2019, which corresponds to the third quarter of its 2019/20 financial year.
Tendam posted a 3.6% increase in sales (2.5% in like-for-like sales) to €256.3 million during this quarter. Sales for the first ninth months of the 2019/2020 financial year totalled to €815.8 million, representing an increase of 1.8%. Online sales between March and November were up 28%, representing 9.2% of Tendam’s total sales in Spain.
The Company continued to increase its gross margin, reaching 67% in the third quarter (+0.1 p.p.). The margin stood at 63.9% (+0.4 p.p.) for the first ninth months of the year. This performance is a result of the successful positioning of the Tendam brands in the premium mass market as well as the active stock management strategy.
From September to November 2019, EBITDA –reflecting the application of the IRFS 16– amounted to €62.1 million versus €24.7 million in the same period last year. Excluding the application of the IFRS 16, EBITDA for the period would have stood at €26.3 million, representing an increase of 6.6%.
Tendam Chairman and CEO, Jaume Miquel, commented: “In a year marked by significant volatility, the Group, as a whole, has consistently improved quarter by quarter, representing a clear indication of the healthy standing of our brands and the strength of our unique business model. Forecasts remain cautiously positive, kicking off with a robust sales period”.
With €19.1 million in free cash flow generated between March and November (€1.1 million up YoY), Tendam continues to showcase its cash generation capability. At Q3-end, Tendam’s debt had been scaled back to €434.8 million, reducing its leveraging ratio to 2.7x EBITDA, below the 3.1x EBITDA posted in November last year (pre-IFRS 16, like-for-like data).
Over the last 12 months, Tendam opened 31 new directly-operated stores, 14 between September and November 2019. At Q3 2019/20-end, the Group had reached a total of 2,036 points of sale.
In November, the Company acquired and incorporated the Hoss, Hoss Intropia and Intropia brands into its portfolio and has plans to relaunch them in the autumn-winter 2020 season. These brands will benefit from Tendam’s strong operating and management structure and will cement their position in women’s apparel within the premium mass market. The new collections will be sold online and in selected Cortefiel brick and mortar stores.
Omni-channel and CRM strategy
Online sales were up by 28% thanks to the consistent progress and performance of Tendam’s omni-channel strategy. This strategy is based on an ecosystem built on strong brands and a close customer relations model thanks to the Group’s loyalty programmes. Tendam’s unique model optimises its extensive network of brick and mortar stores through efficient and profitable online operations.
As regards international e-commerce, Women’secret and Springfield launched in a new market, Hungary, during the third quarter. Tendam continued to make headway in its multi-brand pick-up-in-store strategy in Spain, which will extend to Portugal after registering positive results.
The Tendam brands’ loyalty programmes reached 24.9 million members (up 6.5% on November 2018) and their associated sales accounted for 76% of the total (+1 p.p.), becoming one of the main assets and a key part of the company’s ecosystem.
The company forged ahead in sustainability in 2019 as part of its strategy for the coming years.
In terms of products, the brands continued developing and enhancing their different sustainable lines. 50% of denim purchased by Tendam brands is H20, which uses up to 90% less water in the manufacturing process. The company aims for its sustainable collections to account for more than 50% of its retail offering by 2030.
At the end of the quarter, Tendam had reached various milestones, including:
In December 2019, Tendam joined the Fashion Pact G7, the global coalition of leading fashion brands that are committed to a common core of key environmental goals concerning Climate Protection, Biodiversity and the Oceans.
In the same vein, within the context of the United Nations Climate Change Conference 2019 (COP25) held in Madrid at the start of December, Tendam has received recognition from the UN Global Compact for its adherence to the Business Ambition for 1.5ºC initiative.
Tendam also signed a contract to purchase certified-renewable energy as of 1 January 2020 for consumption in all its facilities and in 98% of the Group’s retail space in Spain, its primary market.