German fashion company Tom Tailor Group has seen its performance improve considerably in the second quarter, helping the business to a “quite satisfactory” first half.
The Hamburg-based firm said sales of its Tom Tailor brands rose 1.2% to EUR277.8m (US$316m) in the first six months, although the group’s total sales slipped 1.0% to EUR399.3m. It attributed the decline to technical difficulties in starting up its new e-shops and a weak first quarter for the Bonita brand.
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However, while the group’s reported gross profit margin increased to 60.8% from 56.5% a year earlier, absolute gross profit fell 3.6% to EUR242.9m from EUR252.0m due to closures under its Reset restructuring programme.
Net income for the first half jumped to EUR2.0m from EUR0.1m in the prior year.
For the second quarter, revenue fell 7.8% to EUR209.5m from EUR227.4m, with declines across Tom Tailor wholesale and retail. But Bonita sales edged up by 1.4% to EUR69.6m – and net income for the quarter jumped 61.0% to EUR10.6m.
“The first six months of 2018 were challenging overall,” said Dr Heiko Schäfer, CEO of the Tom Tailor Group. “After an unsatisfactory first quarter, the results of the second quarter give us confidence – even though we have not yet arrived where we want to go.
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By GlobalData“As a result, we continue to expect that we will reach the targets set for 2018 and that we are very well positioned for the years to come.”
“Considering the significantly improved financial key figures in the second quarter, we can look back on a turbulent and high-and-low, but in the end quite satisfactory, first half of the year,” added Thomas Dressendörfer, CFO of Tom Tailor Holding.
“The increases, especially in e-commerce and at Bonita, show that we can quickly identify and, above all, turn off the problems that are not unusual for the transformation process we are in. That is why we are optimistic about the second half of the year.”
For the full-year the business hopes to offset a decline in sales due to the Reset measures with profitable growth in the core markets and markets such as Russia and South Eastern Europe.
The Tom Tailor brand is marketed through retail and wholesale channels including 451 Tom Tailor stores and 183 franchise stores, 2,474 shop-in-shops and 7,029 multi-label points of sale. The brand is present in 30 countries. Along with its 791 retail stores, Bonita has 60 shop-in-shop spaces.
