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05/13/2019 | 21:15 CET/CEST

DGAP-News: TOM TAILOR Holding SE / Key word(s): Preliminary Results/Banking Syndicate

13.05.2019 / 21:15
The issuer is solely responsible for the content of this announcement.


Negotiations between consortium banks and Fosun to strengthen the equity base continue - publication of preliminary TOM TAILOR and BONITA results for 2018 and Q1 2019

- No agreement yet between Fosun and consortium banks regarding financial contribution

- Financial contribution to strengthen equity base after BONITA writedown

- Ongoing negotiations delaying publication of final annual financial statements 2018 and Q1 2019 results

- According to preliminary results: TOM TAILOR has held its own in a difficult market environment and has performed better than the competition. Turnover for 2018 up by around 3 percent net of RESET effects

Hamburg, 13 May 2019. As already laid out in the reasoned statement by the Management Board and Supervisory Board dated 18 April 2019 pursuant to Section 27 of the German Securities Takeover Act (Wertpapiererwerbs- und Übernahmegesetz - WpÜG), TOM TAILOR Holding SE (ISIN DE000A0STST2) is in ongoing negotiations with the consortium banks regarding their approval of the sale of the company's shares in BONITA, the adjustment of the financial covenants under the consortium loan agreement as well as a financial contribution by Fosun. The financial contribution should serve to improve the economic equity of TOM TAILOR Group, which was burdened by the continuing deterioration in BONITA's business performance, the full write-down of the brand value in the amount of EUR 184.5 million that became necessary, as well as further significant impairment of assets of the BONITA division on 31 December 2018.

Contrary to the estimation of the Management Board when the reasoned statement pursuant to Section 27 of the WpÜG was announced, the negotiations are becoming increasingly difficult, as no agreement has yet been made between the consortium banks and Fosun regarding the type and amount of Fosun's financial contribution. The Management Board estimates that whether and when the negotiations with the consortium banks and Fosun will come to a successful conclusion it is therefore currently uncertain. The initially promising talks have become increasingly difficult in the past two weeks. A satisfactory solution for all parties, which would give TOM TAILOR Holding SE planning security, remains possible, but not certain.

To support the negotiations, the Board of Management - in agreement with the syndicate banks and Fosun - instructed the preparation of an Independent Business Review (IBR) from the Boston Consulting Group (BCG).

Against the backdrop of these negotiations, the Board of Management cannot currently announce with any reliability when the final Group financial statements for 2018 as well as the results for the first quarter of 2019 can be published and the Annual General Meeting can take place. Therefore, the company is publishing preliminary Group results for fiscal 2018 as well as for the first quarter 2019 in advance.

Preliminary results for fiscal 2018 and Q1 2019 of TOM TAILOR and BONITA

According to the preliminary results, the turnover of the TOM TAILOR brand in 2018 was EUR 616.9 million. This is a rise of around 3 percent compared to the previous year's figures net of RESET effects, which amounted to EUR 597.8 million (net of the revenue generated by the stores, countries and brands closed down as part of the RESET programme). The preliminary gross profit of the TOM TAILOR brand for 2018 was EUR 349.4 million, which is slightly below the previous year (2017: EUR 351.2 million). This corresponds to a gross profit margin of 56.6 percent (2017: 53.7 percent). Preliminary EBITDA rose slightly year on year to EUR 70.6 million (2017: EUR 67.5 million); accordingly, the EBITDA margin amounted to 11.4 percent (2017: 10.3 percent).

"We are satisfied that our core brand TOM TAILOR continued to develop positively in the previous financial year, despite a very challenging market environment and against the market trend," says Dr. Heiko Schäfer, CEO of TOM TAILOR Holding SE and continues "This gives us a tailwind for the current financial year". Thomas Dressendörfer, CFO of TOM TAILOR Holding SE adds: "Our business model with a healthy mixture of wholesale, retail and e-commerce has proven successful in a very difficult year such as 2018".

In accordance with IFRS 5, the business results of BONITA will be posted separately as discontinued operations due to the sale of the business division on 20 March 2019. The discontinued business division BONITA generated turnover of EUR 225.7 million in fiscal 2018 according to preliminary results, compared to EUR 255.1 million in the previous year (net of the effects from the RESET programme). Gross profit was EUR 140.1 million (2017: EUR 186.5 million), EBITDA amounted to EUR -24.6 million, compared to EUR 15.6 million in the previous year.

In the first quarter of fiscal 2019 too, the textile industry continued to face difficult market conditions overall: Declining turnover, downward adjustments to annual forecasts and insolvencies are burdening the competition. In this environment, the TOM TAILOR brand has again held its own, generating turnover of EUR 138.0 million in the first quarter of 2019. This is on a par with the previous year's figure (Q1 2018: EUR 137.9 million) and is in line with the company's expectations. Gross profit rose slightly in Q1 2019 to EUR 76.8 million (Q1 2018: EUR 75.3 million), thus reaching a gross profit margin of 55.7 percent (Q1 2018: 54.6 percent). EBITDA (before the first time application of IFRS 16) amounted to EUR 2.6 million (Q1 2018: EUR 11.7 million), with an EBITDA margin of 1.9 percent (8.5 percent in the previous year). The EBITDA of TOM TAILOR includes higher budgeted marketing and personnel expenses as well as extraordinary, one-time consulting expenses in the amount of EUR 2.0 million.

At the discontinued business division BONITA, turnover in the first quarter of 2019 was EUR 40.6 million, compared to EUR 51.8 million in Q1 2018. Gross profit was EUR 24.9 million (Q1 2018: EUR 33.4 million). EBITDA was EUR -12.8 million, compared to EUR -7.6 million in the previous year.

About TOM TAILOR Group
TOM TAILOR Group is an international, vertically integrated fashion company focused on casual wear in the medium price segment. The product portfolio is complemented by an extensive range of fashionable accessories. With its brands, the company covers the various core segments of the fashion market. The TOM TAILOR brand is marketed through the retail and wholesale segments, and thus through single-label stores as well as wholesale partners. These include 453 TOM TAILOR stores and 184 franchise stores, 2,546 shop-in-shops and 6,949 multi-label points of sale. The brand is present in more than 35 countries. The BONITA brand, which was sold to Victory & Dreams International Holding B.V. on March 20, 2019, has 742 retail stores and 88 shop-in-shop spaces. The closing of the transaction is subject to the usual approvals from the anti-trust authorities and the consortium banks. The collections of both brands are also available through their respective online shops.

Information is also available at www.tom-tailor-group.com


Media contact
Harriet Weiler
Head of Corporate Communications
Phone: +49 (0) 40 58956-168
E-mail: harriet.weiler@tom-tailor.com


Investor contact
Viona Brandt
Head of Investor Relations
Phone: +49 (0) 40 58956-449
E-mail: viona.brandt@tom-tailor.com


13.05.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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