Tom Tailor has issued a profit warning for its full-year

Tom Tailor has issued a profit warning for its full-year

German fashion business Tom Tailor has issued a profit warning for its full-year, blaming delays on deliveries from its new warehouse and poor market conditions.

In a trading update, the company said it expects to see “moderate” growth in net sales for fiscal 2015, which are expected to range between EUR945m (US$1.06bn) and EUR955m, compared with sales of EUR932m in the previous year.

However, recurring EBITDA is expected to be lower, at EUR75m to EUR80m. This is in comparison to last year's EBITDA of EUR87.2m, and is expected to result in a recurring EBITDA margin below the previous year's of 9.4%.

Tom Tailor has blamed the forecast on initial difficulties with the implementation of its new logistics warehouse, which caused partial delivery delays in the third quarter, and “poor” market conditions in August, which led to the use of heavy promotions.

Nonetheless, CEO Dieter Holzer said: “We know the textile market is difficult. However, we are confident we will sustain our long-lasting market position and gain additional market share. This will be driven by our strategy to accelerate the verticalisation and strengthen our online presence. In parallel we will optimise and further streamline our cost structure.”

In May, the company added a second level to its management structure in a bid to drive forward the verticalisation, which launched in April, at an accelerated pace and increase its competitiveness.

Its step towards consistent verticalisation is designed to enable the group to take “a more targeted approach” to the brands’ individual value propositions and align them more consistently with customer needs.