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Tendam sales rise to €1.19bn after strong Q4

Translated by
Barbara Santamaria
Jun 26, 2020
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3 minutes
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Tendam, the Spanish owner of brands Cortefiel and Springfield is powering ahead after seeing total sales rise 3.2% to €1.19 billion ($1.33bn) in the year ended 29 February 2020. Like-for-like growth across all brands, healthy trading throughout the year and a strong fourth quarter helped deliver the increase. Sales jumped by 6.4% in the final quarter of the year and were up 5% on a like-for-like basis. 

A Pedro del Hierro store in Madrid - Tendam

“We are pleased with our group's performance in 2019. Tendam posted robust growth in the online business which has more than doubled our marginal profit, as well as strong like-for-like sales across all brands and constant improvements in footfall at physical stores,” Jaume Miquel, Tendam chairman and CEO, said in a press release on Thursday.

And the company has reason to celebrate, with plenty of bright spots to be found in its results. Online sales were up 28% during the period, rising by 30.5% in the fourth quarter. And e-commerce is now driving nearly 10% of the group’s sales in Spain, a share that is likely to increase in the post-Covid era.

Tendam wants to accelerate the transition by boosting its loyalty programmes, which has grown by 9% to more than 26 million members in Spain. The goal, “inextricably linked to the growth of its loyalty programmes”, is to triple the size of the group’s online business over the next three years.

“The outstanding result of our online business is thanks to our own particular ecosystem: powerful, sector-leading brands, advanced management of our member base, constant digital investment and a flexible, far-reaching network of stores which is customer-centric and fully engaged with the digital world,” Miquel explained. With a portfolio of fashion brands, including Cortefiel, Pedro del Hierro, Springfield, Women'secret, Intropia and Fifty, the group is well positioned to serve the growing online market.

Meanwhile, gross margin continued to climb, standing at 62%. Adjusted Ebitda pre-IFRS 16 totalled €162 million ($181m), up from €161.7 million a year earlier. Accounting for IFRS 16, adjusted Ebitda was €297 million ($332m). Pre-IFRS 16, profit before tax rose by 0.5% to €81.2 million ($91m).

According to the results, Tendam entered the coronavirus crisis in the strongest financial position in 15 years. At year-end, the company had improved free cash flow excluding interest of €83.1 million. And net debt fell to €430.6 million, representing a debt-to-Ebitda ratio of 2.7, versus 2.8 in the prior year. 

Coronavirus impact

The group, which has a presence in more than 80 countries worldwide and operates 2,000 stores and franchises, placed thousands of head office and store staff on furlough when Spain went into lockdown earlier this earlier. The company agreed to top-up employees’ salaries to 100% during the coronavirus crisis, supported by a €132.5 million loan backed by Spain's Official Credit Institute (ICO).

But the group expects market conditions to remain challenging until 2022, and has previously forecast that sales for the current year could fall between 25% and 35% due to the coronavirus pandemic.

“We firmly believe that Tendam is extremely well-positioned to lead the sector into the future, which will be shaped by five key trends: exponential growth in online business, more responsible consumers, fashion which is more timeless but offers greater added value, the need to integrate sustainability into every facet of our lives and companies taking a more active role in contributing to a better society,” Miquel concluded.

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