The activity of the fashion companies is moving towards normalization after the outbreak of the pandemic. Tendam, which includes the brands Cortefiel, Pedro del Hierro, Springfield, Women’secret, Hoss Intropia, High Spirits and Slowlove, closed its last financial year (March 2021 to February 2022) with a turnover of 1,113.4 million euros, 43 .3% up year-on-year and just 74 million below pre-pandemic levels in 2019. The company returned to profitability with net income of 54.1 million.
The return of customers to physical stores, where there is higher traffic, and the push of the channel on-line have driven Tendam’s results, as reported this Thursday by the company led by Jaume Miquel. “It has been a very positive year as we have made progress and created a differentiated, profitable omnichannel ecosystem with high growth capacity,” says the Chairman and CEO. “The results show that the transformation model that we designed in 2020 and definitely implemented in 2021 is working very well,” he adds.
After a loss of 109.5 million in 2020 due to the impact of the coronavirus, shutdowns, restrictions and capacity constraints, the company is returning to profitability and is close to 2019 figures, which were 56.9 million according to the company. Gross operating profit (ebitda) was 277.2 million, almost double the previous figure. At 122 million, net operating income (ebit) was almost at the all-time high of 2019.
In a preview of the first quarter of the current year, the company points out that although March was complicated by the outbreak of war in Ukraine and its aftermath, the months of April and May “were exceptionally good, with a significant recovery in traffic in the physical stores”.
One of the important changes made by the company was that 80% of the store network already has a single inventory, between the digital and physical sales and the warehouse, which has streamlined the processes and allowed the integration of online purchase and in person . For example 20% of sales on-line They start out in physical stores, but due to a lack of sizes or products, they end up being bought over the internet and then shipped to your home or picked up at the facility.
Purchases in the channel on-line they have grown by 30% compared to the previous year; they already account for 19% of sales in Spain and 14% worldwide, double what it was in 2019. Meanwhile, sales in self-managed stores (about 1,200, the rest are franchises) increased by 45.9% compared to the previous survey. The group has a total of 1,800 stores in 80 countries, a hundred fewer than in 2019, with a strong presence in the Iberian Peninsula and, as a market with great growth expectations, in Mexico.
Decision pending in Russia
Regarding Russia, Tendam has temporarily suspended its activities in the country and has not yet made a decision on future strategy. This market accounts for barely 2% of sales: it operates about 50 of its own stores, all of them women’s secret, and four franchises in Springfield. In Ukraine it only works with franchises and activity has resumed in recent weeks.
All of the group’s own brands increased their sales by more than 30% compared to the previous year. Thus, Cortefiel and Pedro del Hierro (the most affected by Covid-19) stand out, registering the highest sales growth (55%) and the continued positive behavior of Women’secret.
Another important innovation is that Tendam has opened the site to third parties, with commercial alliances with 80 brands and expects to end the financial year with 120-150 brands that usually complement its offer. In addition, new own brands such as Hoss Intropia, Slowlove and High Spirits were introduced in 2021, which were able to record positive EBITDA in the first year.
The company believes that the customer has accepted the selective price increases it has made due to rising energy costs and high inflation in general. The company reported a gross margin of 62% last year, compared to 61.3% in 2020 and pre-pandemic levels
At the end of the year, the liquidity position reached 347.7 million euros compared to 279.6 million euros in 2019 and only 10.5 million euros less than in 2020. In the fourth quarter of 2021, the entire ICO loan that had been requested during the pandemic was used , spent an amount of 132.5 million. Net debt is reduced to 373.8m and leverage increases from 2.7x to 2.4x EBITDA.