Tom Tailor witnesses upsurge in FY17 profitability

The Tom Tailor Group reported EBITDA growth to reach 83.1 million euros (102.5 million dollars) compared to 10.3 million euros (12.7 million dollars) in 2016 and EBIT increased to 43.9 million euros (54.1 million dollars). The company said, separation from low-margin product lines, stores and markets, an increased efficiency in the supply chain and smaller collections ensured that the profitability could be improved by lower costs of acquisition and amortization management among other things. Tom Tailor added that though the group revenue decreased to 921.8 million euros (1,137.9 million dollars) against 968.5 million euros (1,195.6 million dollars) last year, the positive earnings situation offers further scope to push the company's sustainable growth.

"Even though 2017 was a transformation year for the whole Tom Tailor Group, we were able to achieve a very positive result. Thereby, we are about to complete our costs and processes optimization programme Reset," said Heiko Schäfer, CEO of Tom Tailor Holding SE in a statement.

Tom Tailor witnessed increase in retail and wholesale profitability

Retail gross profit increased to 181.7 million euros (224.2 million dollars) in the store business and the EBITDA was raised to 15.5 million euros (19.1 million dollars), although the sales decreased to 304 million euros (375.2 million dollars) due to store closures. The wholesale channel posted sales decrease of 0.5 percent to 350.1 million euros (432.1 million dollars), contrasted by a doubling of EBITDA to 52 million euros (64.1 million dollars) and gross profit increased 6.1 million euros (7.5 million dollars) to 169.5 million euros (209.2 million dollars).

The company added that due to the large-scale cost reduction and efficiency enhancement programme, the gross profit margin of Bonita increased to 69.7 percent, while the absolute gross profit slightly decreased from 186.5 million euros (230.1 million dollars) by 2.9 percent. The store network was reduced by 135 or 14.2 percent to 815 stores, during the year. However, the EBITDA rose from negative 22.6 million euros (27.9 million dollars) in 2016 to 15.6 million euros (19.2 million dollars).

Tom Tailor expects moderate EBITDA rise in FY18

"With the far-reaching measures of our Reset-programme, we set a good financial basis for sustainable growth of our profitability," added Thomas Dressendörfer, CFO of Tom Tailor Holding SE.

In 2018, the company aims to partly compensate the Reset-measures expected slight falls in turnover by profitable growth in the key markets and individual growth markets like Russia and South-East Europe. Therefore, a moderate increase of the EBITDA margin compared to the previous year is forecasted, whereby an upgrade of the digital infrastructure and analytics capabilities will support this development.

Picture:Bonita website