Tendam profits soar to €80.8 million
Spanish retail group Tendam and its brands Cortefiel, Pedro del Hierro, Springfield, Women'secret and Fifty has announced pre-tax profits of €80.8 million ($91.7m, £72.3m) for the year ending 28 February 2019. This is an impressive increase of 379.3% on the previous year, when pre-tax profits reached just €21.3 million.
“2018 reflects Tendam’s strength and that of its business model against a challenging backdrop of increased volatility and uncertainty. In a year marked by adverse weather conditions and geopolitical instability, on a quarter-by-quarter basis we have improved our like-for-like sales and EBITDA, while earnings before taxes increased almost fourfold,” said Jaume Miquel, chairman and CEO of Tendam.
The company’s EBITDA reached €161.2 million, up 0.4% on the previous year. In constant currency, EBITDA increased 1.4% to €162.8 million, a statement revealed on Wednesday. The EBITDA improvement, coupled with several cost-cutting measures, helped Tendam boost its bottom line.
Meanwhile, revenues rose to €1.155 billion ($1.3bn, £1bn) in constant currency and €1.150 million at actual exchange rates, which was a slight increase compared with €1.154 billion in the prior year. The group said that like-for-like sales performed best during September 2018 and January 2019, even though it was a year of adverse weather conditions and geopolitical instability.
On the other hand, online sales grew by 29.4% during the period, with all brands in the group’s portfolio showing an improvement. Women’secret was a star performer, with e-commerce sales up 34.9%, followed by Cortefiel and Pedro del Hierro, which reported a rise of 32.4% each.
As a result of this, the group’s financial expenses were cut by €46 million thanks to a new debt structure, while net debt stood at €451.2 million. Over the course of the financial year, Tendam invested €65.88 million to buy back and pay off its debt.
In recent times, the fashion group, specialised in the premium mass market segment, has focused its efforts on building an omnichannel strategy that can integrate its online business with its bricks-and-mortar locations. With this in mind, it launched a collection service in Spain that allows customers to collect their online Cortefiel and Pedro del Hierro orders at more than 120 Springfield stores across the country. Additionally, online customers can now reserve an item for 48 hours in selected stores.
At the end of the 2018/19 financial year, Tendam had 1,993 stores in more than 80 countries worldwide, including 1,242 directly-operated locations, 632 franchises and 119 concessions. During the year, the company added 65 directly-managed stores to its portfolio.
Additionally, the Spanish retailer said 23.9 million customers joined its loyalty programme during the period, representing an 8.5% rise on the prior year’s period.
At the beginning of June, Tendam announced Jaume Miquel as its new executive chairman. He also currently holds the company’s chief executive officer role. His appointment came weeks after the departure of Miguel Ibarrola, who served as non-executive chairman for almost three years.
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