Tom Tailor lowers profit outlook, considers selling Bonita

Tom Tailor Holding SE has reaffirmed its medium-term growth targets in a continuously challenging market environment and said that it will focus on continuing the successful growth strategy of the Tom Tailor core brand. The company added that weaker than expected operational performance of Bonita will lower the EBITDA of the group. Biggest shareholder Fosun Group, with 28.89 percent stake, as well as the financing banks have supported further development of Tom Tailor and the restructuring plans for Bonita. In addition, the supervisory board will appoint Karsten Oberheide, managing director of Bonita GmbH since September 2018, to the Tom Tailor board as of January 1, 2019.

"The measures we have introduced are the right steps at the right time for strengthening the group in the current market environment", said Dr Heiko Schäfer, CEO of Tom Tailor Holding in a statement, adding, “We give the new management team of Bonita the space it needs to keep following the restructuring course for the future and this may also entail a sale of Bonita."

Tom Tailor lowers full year EBITDA target

Focusing on growth of its core Tom Tailor business, the company said, strategic priorities in this context include profitable growth in the existing core business, online in the B2C and B2B segments, in the ladies' outerwear segment, by further internationalising the brand and though the "younger" line Tom Tailor Denim.

The company further added that in order to be able to manage implementing the program more stringently and to reflect the future status of BONITA as an independent business unit, the new Bonita department has been created on the management board of the Tom Tailor Group, with full responsibility for the results of the subsidiary. Based on the new multi-year-plan reflecting the weaker development of the Bonita, the group will write down 120-130 million euros against the value of the BONITA brand.

While the group's annual sales targets remain unchanged between 840 and 860 million euros, Tom Tailor now expects to generate an EBITDA margin of 6-6.5 per cent for the financial year 2018. The management board expects the business unit Tom Tailor to reach an EBITDA-margin of >10 per cent, while Bonita is expected to finish the business year with a negative EBITDA-margin.

For 2021 the group expects Tom Tailor to deliver a moderate single-digit compound annual growth rate in sales and an EBITDA-margin of 11 to 13 per cent. In the same time the group expects the business unit Bonita to remain flat in terms of sales and to deliver an EBITDA-margin of 4 to 6 per cent.

Picture:Tom Tailor media centre