Tendam’s rating is upgraded on the back of its robust recovery and deleveraging.

Credit rating agency S&P has announced it is upgrading Tendam — one of Europe’s leading omni-channel groups in the speciality fashion sector — to a B+ with a stable outlook.

According to the S&P press release, Tendam’s results for the first nine months of its 2021-22 fiscal year (March through November 2021) showed strong signals of recovery thanks to the robust rebound of the group’s legacy brands and the impact of the Tendam 5.0 transformation strategy, despite volatility caused by the pandemic. 

S&P Global’s rationale for the rating upgrade is based on Tendam’s results from the first nine months of FY 2021-22, which demonstrated strong operational performance and a progressive normalisation of sales. Thanks to active cost and working capital management, Tendam was also able to create significant cash flow generation which has made possible the early repayment of a state-backed loan (ICO). All this, together with the recovery of profitability, have driven up its credit rating to a B+, validating the company’s prudent approach to its debt management.

All the group’s brands recovered and contributed to its revenue growth, with portfolio diversification and segmentation and the launch of new brands playing fundamental roles in a volatile environment.

A factor the rating agency considered in its assessment was Tendam’s development of its digital channel which should benefit Tendam’s margins, given that the online channel is typically more profitable than store sales. Online profitability should be further reinforced by Tendam’s proprietary marketplace, which adds visibility to its own brands.

The stable outlook indicates that S&P expects Tendam to continue its solid performance despite macroeconomic uncertainty, and that the fashion company will be able to maintain strong revenue growth thanks to its ability to adapt its business model to the latest trends.