Tendam posts positive adjusted EBITDA for second quarter running

• Adjusted EBITDA for the third quarter of the financial year 2020/21 stood at €35.6m (€3.5m pre-IFRS 16).
  
• The 16.7% drop in like-for-like sales and 23.1% drop in total sales clearly reflected the restrictions implemented to tackle the second wave of Covid-19, particularly in November.
• Online sales were up 79% year-on-year, accounting for 20% of sales in Spain both in Q3 and year to date.
• Key management indicators such as inventory, expenses and cash generation performed well, in line with the company’s forecasts, demonstrating Tendam’s capacity to weather the crisis.
• Tendam’s loyalty club member numbers continued to grow at a healthy pace of 7%, to stand at 27.2 million.

Tendam Brands, the parent company of Tendam, one of Europe’s leading omni-channel retailers in the specialist fashion sector, has today announced its results for the period from 1 September until 30 November 2020, which corresponds to the third quarter of its 2020/2021 financial year.

Impacted by lockdowns, restrictions and limits on capacity across most of its markets during the second wave of the Covid-19 pandemic, particularly in November, the company’s total sales in Q3 stood at €197.2m, down 23.1% year-on-year; like-for-like sales were down 16.7%.

Online sales continued to climb during the period with a solid 79% increase. The online channel now accounts for 20% of the Group’s total sales in Spain, bringing the company consistently closer to its goal of tripling its digital business over the next three years.

Tendam Chairman and CEO, Jaume Miquel, said: “The future is digital, but still it needs to be connected to a physical shop. 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.”

Third quarter 2020/2021 adjusted EBITDA was positive for the second quarter running at €35.6 million (EUR 3.5 million, pre-IFRS16). Between September and November, Tendam posted a negative pre-tax result of €-19.7 million (€-17.9, pre IFRS16).

Against a tougher-than-expected backdrop due to the second wave of the pandemic, Tendam was able to increase its free cash flow by €30.8 million, thanks to improved working capital driven by stock reduction (-15.4%), lower costs (-14.2%) and lower CAPEX investment, prioritising investments associated with the digital strategy. In addition, as of 30 November net debt was down to €494.2 million from €524 million in August 2020.

Tendam Chairman and CEO, Jaume Miquel, commented: “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.”

Even with restrictions on movement in place, membership of Tendam’s loyalty programmes continued to see significant growth, reaching 27.2 million members as of 30 November (+1.8 million members in the last twelve months). Of the total sales in Tendam’s directly-operated stores, loyalty programme members accounted for 73.9%, including the recently launched loyalty club for the Fifty brand.

With regard to Tendam’s sustainability commitments, the company was awarded a score of “B” from the Carbon Disclosure Project (CDP), recognising its position as a transparent company with ambitious global goals reflected by its climate change strategy and policies.