Tendam ends the first half of 2018 with €39m profit

Spanish clothing group Tendam, owner of brands Women’Secret, Cortefiel, Pedro del Hierro, Springfield and Fifty, has ended the first half of the year with pre-tax profits of €38.9 million ($44.2m), compared with losses of €0.272m in the same prior-year period.


Tendam owns several clothing brands including Cortefiel - Grupo Tendam

The results for the period ended 31 March 2018 put Tendam back on the growth track. The group had total sales of €554.4 million euros ($631.3m), down 1.6% compared to the first half of 2017. The decline was offset by a “cost-efficient and margin-conscious operational management,” Tendam said in a press release on Monday.

The group attributed the good results primarily to the increase in online group sales, which grew by 27% during the period with “positive performance across all brands,” it said. Currently, online sales account for 7% of the company’s total sales in the Iberian Peninsula. The group plans to continue driving this channel over the next periods: “Tendam plans to strengthen its omnichannel strategy globally and strengthen the e-commerce business in all directly-operated markets, starting with Russia,” it said.

The company’s underlying EBITDA reached €164 million ($186.7m), while unadjusted EBITDA was €79.4 million ($90.4m), compared to €85.4 last year. In the first six months of the year, the company also reported a gross margin of 62%.

Tendam also cited its effective stock management as another reason for its positive half-year performance. “The active stock management has resulted in a positive reduction of almost 6 million euros, down 3.5% compared to August last year,” explained the company, adding that its efforts were reflected in a 1% reduction in operating costs and 2% in structural costs.

Additionally, the Spanish group managed to reduce its net debt from €514 million at the end of the second half of last year to €479.6 million ($545m) as of 31 August. This means that the company’s net debt to EBITDA ratio has dropped 2.9 times.

As well as focusing on building its online presence, Tendam continued to push ahead with its international expansion plan with new openings across several markets. Currently, it has stores in 91 countries, including newly-launched locations in India, Mauritius, Reunion and Sicily. In the first half of the year, it opened 28 stores, reaching a total of 2,016 locations by the end of August, compared with 1,932 in the first half of 2017. Of these, 1,207 are directly-owned, 691 are franchises and 118 are concessions.

Tendam CEO Jaume Miquel commented on the company’s first-half results: “The company had a satisfactory performance in a half-year defined by adverse elements. The improved profitability, increased margins, the efficiency in the management of expenses and stock reduction, and strong growth in cash generation demonstrate the strength of our strategic plan.”

Translated by Barbara Santamaria

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