The Coronavirus crisis has also left its mark on Tom Tailor GmbH. Although the Hamburg-based company was not doing particularly well even before Covid-19, this was due in particular to the poor performance of the subsidiary Bonita, but last autumn the fashion group was able to secure its financing. Corona has now shaken this again. Tom Tailor had already spoken about significant liquidity and financing problems at the end of March 2020.
“Like everyone else in the fashion industry, the Tom Tailor Group has been hit very hard by the present crisis. Since the first quarter of 2020, we have fought day and night to secure the continuation and financing of all business units of the Tom Tailor Group,” explained Christian Werner, CFO of Tom Tailor Group and managing director of Tom Tailor GmbH.
In an official statement Tom Tailor GmbH recently announced that an additional €100 million revolving credit facility for the company will safeguard the active further development of the fashion brand. The financing has been secured with a guarantee provided by the Federal Republic of Germany, the Free and Hanseatic City of Hamburg and the Federal State of North Rhine-Westphalia and will be furnished by the existing consortium of banks. In addition, the existing financing for Tom Tailor will be extended until September 2024. This will enable the brand to actively develop its business with its approximately 3,400 employees and further strengthen its long-standing trading partner and supplier relations.
“Tom Tailor as a fashion brand and Tom Tailor GmbH are ready for a kick-start, and we intend to make good use of this opportunity,” said Gernot Lenz, managing director of Tom Tailor GmbH and CEO of the Tom Tailor Group.
The focus is now among others on pushing growth in the online business, an international expansion outside the core markets as well as targeted investments into product quality, especially accelerating sustainability activities. An extensive efficiency program will be implemented in the coming months in response to the effects the Covid-19 pandemic on revenue and earnings in the current financial year and in 2021.
The subsidiary Bonita had also sought government aid. The capital loan of €100 million however was only approved for the Tom Tailor GmbH. For Bonita, the donors did not see "sufficient financing and surety.” According to the company Bonita GmbH will apply for the opening of a Chapter 11-like protective shield procedure under its own administration. The bankruptcy of Tom Tailor Holding SE is also inevitable due to its intra-group obligations towards Bonita GmbH. The company's board of directors has therefore decided to file for bankruptcy at the district court in Hamburg.
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