In the first quarter of the financial year – which coincided with the Covid-19 lockdown period of March, April and May – online sales grew by 54% to represent 44% of total sales in Spain. Total revenues were down by 76.2% versus the first quarter of financial year 2019/20. Physical stores were closed throughout practically the entire period due to the Covid-19 pandemic.
The company’s gross margin stood at 66.7%, reflecting the larger proportion of online sales. Gross margin for online sales rose by 2.8 percentage points year on year to 67.1%.
Adjusted EBITDA pre-IFRS 16 totalled -47 million euros; accounting for IFRS 16, it stood at -12.7 million euros.
Despite the lockdown measures in place, the agile, flexible model of Tendam’s supply chain allowed the company to pare down its stock levels by 1.1 million euros year on year in Q1 2020/21.
Tendam took the necessary steps to safeguard liquidity and secured 132.5 million euros in ICO-backed financing.
The number of loyalty club members rose to 26.1 million.
Tendam helped socially mitigate the impact of the Covid-19 crisis on the community by managing and participating in donations of medical supplies and products worth over 2 million euros.
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 brands Cortefiel, Pedro del Hierro, Springfield, Women’secret and Fifty, has announced the results for the first quarter of its 2020/21 financial year, running from 1 March to 31 May 2020.
The Q1 reporting period coincided with the peak of the Covid-19 pandemic, with practically all stores fully closed in most of the markets where Tendam operates. Physical store closures and restrictions on capacity and movement had a direct impact on total sales, which fell by 76.2% to 52.1 million euros. LTM (last twelve months) revenues were down by 11.1% from 1.15 billion to 1.02 billion euros.
Tendam’s digital sales grew by 54% between March and May 2020 and represent 44% of total revenues in Spain. Women’secret posted particularly strong growth of 115% over the period. The digital business, which the company expects to triple over the next three years, posted a gross margin of 67.1%, up by 2.8 percentage points from 64.3% in Q1 2019.
Tendam Chairman and CEO Jaume Miquel said: “The unprecedented situation in this period has further demonstrated that our digital business is a crucial part of the Tendam ecosystem and strategy. Our loyalty clubs are inextricably linked to a digital model which is fully connected to an extensive, flexible store network, taking us ever closer to our goal of tripling digital sales over the next three years. The stronger profitability of the online business will contribute substantially to growing the Group’s EBITDA.”
Total gross margin stood at 66.7% (-1.2 pp) thanks to the increase in online sales. Stock was pared down by 1.1 million euros at the end of May thanks to the decisive, efficient action taken early on in the pandemic to mitigate any excess inventory risk.
Between March and May 2020, adjusted EBITDA pre-IRFS 16 stood at -47 million euros, versus 13.1 million euros in Q1 2019. Accounting for IFRS 16, adjusted EBITDA totalled -12.7 million euros over the period.
After closing the financial year 2019/20 in the strongest financial position for 15 years, Tendam took the necessary measures in the first quarter of this year to protect its liquidity position and build in greater flexibility to tackle the impact of Covid-19 on the business. The company had access to its revolving credit line (189 million euros) and secured additional financing worth a total of 132.5 million euros through a loan backed by Spain’s state-owned Official Credit Institute (ICO) and granted by a syndicate of Spanish and French banks.
Between March and May 2020, the number of members of Tendam’s loyalty clubs – which are a key asset for the Group – increased by 8.8% to a total of 26.1 million euros. Over the course of the quarter, the company completed its migration from traditional CRM to advanced analytics in equipment and systems alike.
The Group sought to mitigate the social impact of the Covid-19 crisis through two key lines of action: protecting the Tendam team and actively contributing to the community. Tendam topped up the salaries of its furloughed employees to 100% during the State of Alarm, as well as offering them interest-free microloans, which were taken up by over 2,000 employees. The company made its logistics capabilities fully available to the health authorities, care homes and hospitals, managing the acquisition of over 1 million euros’ worth of medical supplies (part of which was fully-funded by Tendam and part on behalf of other companies, such as Openbank and CLH). In addition, through the initiative #TodosSumamos-El hilo que nos une, the Group donated over 50,000 garments to hospital patients and frontline healthcare professionals. These donations, coupled with other initiatives, totalled over a million euros’ worth of products.
Tendam Chairman and CEO Jaume Miquel added: “Our core lines of action over the course of this quarter have focused on protecting our employees and customers, safeguarding the company’s liquidity, managing stock efficiently, stepping up strategic projects in the pipeline and actively supporting society as a whole.
We approached this unprecedented crisis from a very strong financial position, which has been crucial in allowing us to provide decisive, robust support for the entire team. I am extremely grateful for the outstanding contribution of our entire team and their unwavering, united efforts to ensure our customers get the very best service every single day, in a safe, supportive environment.”