Tom Tailor brand's Q3 sales rise amid difficult market

Tom Tailor Group said in a statement that despite the company still fighting difficult conditions of the textile market, Tom Tailor brand sales in the third quarter improved by 1.9 percent to 163.6 million euros (184 million dollars). The company said, the whole textile industry suffered under the challenging long and hot summer, which was one of the reasons for the slowing business and decline in sales in own stores. Sales of the Bonita brand dropped by 16.7 percent to 50.7 million euros (57 million dollars). The company expects that the return to a sustainable profit growth will take even longer than expected, and affects the growth of the whole group in a negative way. In the third quarter, total turnover of the group shrunk by 3.2 percent to 214.3 million euros (241 million dollars).

"The third quarter not only was a great challenge for us, but for the entire textile industry due to the extremely long and hot summer. Despite the unfavourable market conditions we are pleased with the development of the Tom Tailor brand," said Dr. Heiko Schäfer, CEO of the Tom Tailor Group in a statement, adding, "On the other hand, the Bonita brand reported a disproportionate decline in sales and earnings. Therefore, it clearly didn't meet our expectations. First of all, we will focus on stabilizing the business."

Tom Tailor wholesale posted positive growth

Despite all the challenges of the third quarter, the company added that Tom Tailor brand has grew in the wholesale segment by 7.3 percent to 97.6 million euros (109.6 million dollars) driven by growth in Russia, the Nordic and Baltic countries, Greece and Spain. Despite the trend, sales in the core market Germany remained stable and even Austria recorded a small increase. In total, the gross profit margin in the Tom Tailor wholesale segment increased by 3.6 percent to 53.2 percent, while the reported EBITDA of 19.2 million euros was below previous year's level.

Because of the RESET effect, which included the closing of stores and brands, and the weather-related weak start of the autumn season in August and September, Tom Tailor said, the quarterly sales of the retail segment decreased by 5.2 percent to 65.9 million euros (74 million dollars). The gross profit margin increased by 1.3 percentage points to 58.1 percent, while reported EBITDA at 0.1 million euros, was slightly better compared to the previous quarter.

Reported EBITDA at Bonita declined to 9.3 million euros (10.4 million dollars), and gross profit margin decreased from 69.9 to 63 percent of the previous year's level.

During the first nine months in 2018, the Tom Tailor brand sales posted a decline of 1.8 percent to 613.5 million euros (689.7 million dollars).

Picture:Facebook/Tom Tailor