Tendam reports 23.1% drop in revenues but maintains positive EBITDA
Tendam, the Spanish fashion group that owns the Cortefiel, Pedro del Hierro, Springfield, Hoss Intropia and Fifty brands, continues to feel the impact of the Covid-19 pandemic. In the third quarter running from 1 September to 30 November 2020, the company saw its sales fall 23.1% year over year to 197.2 million euros, a 16.7% decline on a comparable basis.
This fall in revenues reflects a quarter which was deeply affected by the "lockdowns, restrictions and limits on capacity" related to the second wave of the pandemic. Nonetheless, although the company's brick-and-mortar revenues are still suffering from the issues caused by Covid-19, online sales rose 79% compared to the prior-year period, accounting for 20% of national revenues.
"The future is digital, but still it needs to be connected to a physical shop," said Tendam chairman and CEO Jaume Miquel in the release that announced the company's quarterly results. "We maintain an extensive network of stores that contributes both to optimising customer service as well as fortifying our footprint across Spain, our primary market. Our ecosystem is rooted in digitalisation, the strength of our loyalty programmes and a flexible network of shops within arm’s reach of our customers," he added.
Third-quarter EBITDA was 35.6 million euros (3.5 million before the application of regulation NIIF16), a positive result for the second consecutive quarter. The company, which said that the second wave of the pandemic constituted "a tougher-than-expected backdrop" for the quarter, was also able to increase its free cash flow by 30.8 million euros thanks to improved working capital, a result of stock reductions (-15,4 %), lower costs (-14,2 %) and the prioritisation of investments related to the group's digital strategy. As of 30 November 2020, the company's net debt was 494.2 million euros, down from 524 million in August of he same year.
"I am very satisfied with the work of all our teams. Despite the negative impact the second wave had on sales, inventory and cost reductions put us in a position to create positive EBIDTA for the second consecutive quarter, increase our cash generation and reduce debt, demonstrating the company’s successful operating capacity," concluded Miquel.
Tendam currently operates six brands in 70 countries, where it boasts 1,900 points of sale, including company-owned stores, e-commerce platforms and franchise locations. In September 2020, the group also announced the launch of a new multibrand omnichannel platform, through which it sells products from third-party brands.
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