With the publication of the provisional figures for the financial year 2016, the Tom Tailor group, which includes the brands Tom Tailor and Bonita, is showing the first results of the 2016 launched cost reduction and efficiency program. The company recorded a slight increase of 1.3 percent in sales to EUR 968.5 million and consolidated EBITDA of EUR 10.3 million. As expected, the annual result, including the RESET measures, is negative at around EUR 73 million (provisional).
“In the current fiscal year 2017, we will do the remaining cleanup."
The company is also continuing to consolidate in 2017, implementing a comprehensive savings program that was initiated by the new management board in October 2016. Therefore, the management adopted radical cuts: a total of 300 stores were to be closed and the company also discontinued the lines Tom Tailor Polo Team and Tom Tailor Contemporary. In the summer of 2017, the brand Bonita Men will also be taken off the market. In addition, the Group will retreat from several markets: by the end of 2016, it already withdrew from South Africa, and this year the company plans to "retreat from China, the USA and largely from France". According the company for Bonita brand, "tight cost management" was introduced and the cost base thus "reduced by almost ten percent". In the current year, the restructuring program will be preceded by further cost-cutting measures.
"We separate step by step from contaminated sites. This meant financial cuts for the year 2016. But we have crossed the bottom. The first positive effects were already visible in the fourth quarter: the gross profit margin at Tom Tailor and at BONITA as well as the adjusted cost structure have already been slightly improved," explains Dr. Heiko Schäfer, interim CEO and COO of Tom Tailor Holding AG. “In the current fiscal year 2017, we will do the remaining cleanup."
At the same time, the company plans to invest in its remaining brands Tom Tailor, Tom Tailor Denim, Kids and Bonita to sharpen their profiles and increase their desire. In addition, the company will further expand its omni-channel sales channel and its own e-shop in the growing digital market. Another key component of the foundation for the future is the harmonization and modernization of the IT landscape, in particular through the planned SAP implementation.
