• The strong performance of sales and margins in the second quarter translated into positive accumulated earnings in the first half of its financial year of €559.9 million, up 0.9% YoY. Q2 sales increased by 2.3% to €340.6 million, whilst EBITDA rose to €93.1 million.
• The company posted a 0.4 percentage point improvement in its gross margin during the first six months of its financial year to 62.4%.
• Online sales grew by 39% in the second quarter to account for 8.9% of total sales in Spain. Cumulative growth in the first half of its financial year stands at 37%.
• The company opened 44 directly-operated stores in the last twelve months.
• The Group is making headway in its sustainability strategy. Of note is the fact that “H₂0” sustainable denim accounted for 50% and 70% of the Springfield and Cortefiel Man retail offering, respectively, among other environmentally-conscious products and collections across the Group’s brands.

 Madrid, 28 October 2019 – Tendam Brands, the parent company of the Group, one of Europe’s leading fashion retailers operating in the specialised chain segment through the Cortefiel, Pedro del Hierro, Springfield, Women’secret and Fifty brands, has announced today its results for the period from 01 June 2019 until 31 August 2019, which corresponds to the second quarter of its 2019/20 financial year.

Tendam posted a 2.3% rise in sales (2.6% in like-for-like sales) to €340.6 million during the second quarter of its 2019/20 financial year. Sales in directly operated stores were up by 4.1%.

1H sales saw an increase of 0.9% to €559.5 million on the back of double-digit growth in online sales and the global expansion of the directly operated store network. May marked an important turning point in terms of positive growth in the first half of the year, which continued throughout the summer months and sales period.

Online sales in the second quarter of the year grew by 39% to represent 8.9% of Tendam’s total sales in Spain. All brands have posted double-digit growth, with the best upturn registered by Women’secret (+54.2%), followed by Fifty, Cortefiel, Pedro del Hierro and Springfield.

The company continues to forge ahead with its plans to strengthen its loyalty programme, drawing on the new analytical capabilities in teams and systems, with support from the newly-created Data Science Department. With more than 24.6 million members, Tendam’s loyalty programmes are one of its key assets. At 1H 2019 close, loyalty programme sales accounted for 74% of Tendam’s sales (+1 p.p on August 2018).

In line with the market positioning of its brands in the premium mass market, Tendam increased its gross margin by 0.4 p.p to 62.4% in the first half of the year. The company posted steady growth in its gross margin during the first quarter (67.9%; +0.4 p.p) and second (58.9%; +0.5 p.p).

From June to August 2019, Tendam’s EBITDA –reflecting the application of IFRS 16– amounted to €93.1 million versus €61.4 million in the same period last year. Excluding the application of IFRS 16, EBITDA during the quarter would have been €700,000 less.

Cumulative pre-tax profit in the first half of the 2019/20 financial year stood at €32 million versus the €38.9 million posted last year, reflecting the application of IFRS 16. Excluding the application of IFRS 16, 1H pre-tax profit would have stood at €36.2 million.

LTM pre-tax profits amounted to €78.1 million, up €20.4 million YoY.

Tendam generated significant free cash flow of €31.9 million in the first half of its 2019/20 financial year. At 1H-end, Tendam’s debt had been scaled back to €421.1 million versus 479.6 million in August last year, with a leveraging ratio of 2.7x EBITDA, below the 2.9x EBITDA posted in August 2018 (pre-IFRS 16 like-for-like data).

Tendam Chairman and CEO, Jaume Miquel, said: “The results are testament to our solid and consistent business model. Despite a backdrop of economic and geopolitical instability, we’re cautiously optimistic about the future. The combination of the strengths of our brands, advanced and integrated CRM capabilities in our loyalty programmes, as well as the close ties between the online business and our streamlined store network constitutes the best guarantee to secure positive and profitable growth”

Tendam has opened 44 new directly operated stores in the last twelve months, closing the first quarter with a total network of 2,012 points of sale.

Sustainability strategy

Tendam continues to make significant strides in its sustainable agenda, posting higher sales derived from more sustainable products across all of its brands. Tendam’s sustainability model is a cornerstone of its long-term value proposal which encompasses all its brands.

As regards Springfield, H₂0 Denim, for which up to 90% less water is used in the manufacturing process, and the Reconsider collections, now account for 50% and 14% of total acquisitions by the brand, respectively. During the first half of the year, Tendam’s casual clothing brand launched the Reconsider fragrance, which is both natural and biodegradable in terms of the product and packaging.

Women’secret launched the Honest line (manufactured with organic cotton and recycled materials), which accounts for 15% of the basic support garments collection.

H₂0 Denim in Cortefiel Man now accounts for more than 70% of jeans procured from suppliers. Cortefiel Woman rolled out the “Eco-Friendly” initiative (incorporating organic cotton and recycled polyester), which now accounts for 9% of the brand’s total purchases from suppliers.

“The company is firmly committed to expanding the more sustainable collections and programmes in the coming quarters. Tendam and its brands are deeply committed to society as a whole. Initiatives including the Post-Surgery Bra and Honest by Women’secret, Reconsider by Springfield or Eco-Friendly at Cortefiel have gone down extremely well with our customers and they encourage us to power on in this direction”, added Jaume Miquel, Chairman and CEO of Tendam.