Tom Tailor CEO Dieter Holzer
Tom Tailor CEO Dieter Holzer
 

21 Mar. 2012

TOM TAILOR WITH RECORD RESULTS

In its fiscal year 2011, casual fashion brand Tom Tailor has recorded an 18.4% increase in group sales to €411.6 million. The retail segment grew by 44.9%, gross profit margin improved by 3 percentage points to 49%. For the first time in the two years after the IPO, the company plans to declare a dividend of €0.17 per share planned for first time in the light of its good performance. Tom Tailor is now among the Top 10 of the best-known fashion brands in Germany.

At today’s press conference in Frankfurt/Main, the company stated that this sales growth reflects the company’s successful management of fashion trends, the accelerated expansion of its controlled retail space and increased like-for-like sales. In the Wholesale segment, sales rose by 6.6%. The percentage of consolidated sales generated abroad edged up from 31.5% to 35.1%.

Although procurement prices climbed during the course of the year and start-up costs were higher due to the accelerated business expansion, Tom Tailor succeeded in further improving its earnings power. Adjusted for special items, earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 20.0% to €48.1 million and came in as expected. At €46.4 million, the company’s reported EBITDA increased by 54.2% compared to the previous year’s €30.1 million.

“Despite adverse conditions at times, Tom Tailor realized dynamic, profitable growth in 2011. Due to a strong fourth quarter, we were more than able to compensate for the muted summer business which was impacted by the weather. Overall we achieved the strongest percentage growth for five years in 2011 by consistently pursuing our expansion and brand strategy in conjunction with our trend management. We significantly increased our presence via controlled retail space and further strengthened the Tom Tailor brand,” said Dieter Holzer, Chairman of the Management Board (CEO) of Tom Tailor Holding AG.

In the 2011 financial year, Tom Tailor benefited from consistently expanding its sales space, both in Germany and abroad, as well as from its systematic trend management which means to quickly pick up on international fashion trends and offering corresponding products at an attractive price. In addition, the continuous investments into the brand had a positive effect. According to the results of the Outfit 7.0 study by the magazine Spiegel, Tom Tailor is now among the Top 10 of the best-known fashion brands in Germany. In the comparative period examined during the study, consumers’ willingness to buy Tom Tailor products trebled.

Tom Tailor will continue on its profitable growth path in 2012 and accelerate the expansion of its own controlled sales space, both in Germany and abroad. In addition, the company plans to add the new premium product line Tom Tailor Polo Team to the brand’s portfolio in fall.

The group intends to open another 60 to 70 retail stores in 2012. In addition to this, Tom Tailor will continue to invest in e-commerce, which is of particular relevance to its younger target groups. The wholesale segment is expected to add between 200 and 250 shops-in-shops, as well as 20 to 25 franchise stores in 2012.

With respect to sourcing, Tom Tailor expects first positive effects from the purchasing company which was established in Asia with Asmara International Ltd. in 2011. The company, which is led by Tom Tailor, will directly manage all buying activities in the future. The first collections are expected to be procured through this purchasing company in the second half of 2012. Through this important strategic move Tom Tailor is not only closer to its procurement markets, but secures access to both, cotton and production capacity in the long run. In addition to this, the company expects to benefit from the bundling of purchase orders.

It is currently difficult to assess how the consequences of the ongoing sovereign debt crisis will affect consumer confidence in many European countries in 2012. Tom Tailor will particularly force its expansion activities in Germany, Austria and Switzerland as it anticipates consumption to remain stable in those markets. At present, the Management Board of Tom Tailor Holding AG expects sales of at least €470 million for the 2012 financial year. Following adjustments for non-recurring expenses, it forecasts EBITDA of between €51 million and €53 million.
Mona Schmadl

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