DGAP-Adhoc: TOM TAILOR Holding AG: TOM TAILOR GROUP launches new initiatives to significantly raise its profitability

TOM TAILOR Holding AG  / Key word(s): Change in Forecast/Strategic Company
Decision 

20.10.2016 07:30

Disclosure of an inside information according to Article 17 MAR,
transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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TOM TAILOR GROUP launches new initiatives to significantly raise its
profitability

Hamburg, 20 October 2016. TOM TAILOR GROUP's new management team is
launching a set of new initiatives to further improve the profitability of
the Group. These measures will deliver results short term and significantly
exceed the CORE program launched at the end of 2015. The new initiatives
are directed to concentrate on the Group's strong core businesses in an
increasingly changing market environment. It will sustainably strengthen
earnings power and unlock financial resources for investments in the
Group's digital sales channels and brands. TOM TAILOR GROUP will
consequently discontinue loss-making activities. The Group will also
withdraw from unprofitable foreign markets, close additional retail stores
and curtail selected product lines. Going forward, the activities of the
Group will focus on the umbrella brand TOM TAILOR with the Casual, Denim
and Kids lines, as well as on BONITA Women.

The implementation of this cost and process optimization program has led to
a unscheduled one-off charge of around EUR 70 million in the third quarter
of 2016, primarily non-cash expenses. However, the fourth quarter will
already display first positive effects in the earnings before interest,
tax, depreciation and amortization (EBITDA). TOM TAILOR GROUP expects to
substantially improve profitability and achieve a higher reported EBITDA
margin in fiscal year 2017. Furthermore, the Executive Board expects to
reduce the company's gearing faster than previously envisaged. The cost and
process optimization measures will not entail any further financing
requirement and have the complete support of the lending banks.

In view of the unscheduled charge, the Executive Board is withdrawing the
forecast 2016 which was projected in March. An updated forecast for the
current financial year will be presented when the company reports third
quarter results on 10 November 2016.

The new operational cost and process optimization measures are being
implemented using the three levers of geographical presence, store
portfolio and product lines.

In future, the TOM TAILOR GROUP will concentrate its brand portfolio on the
two brands TOM TAILOR and BONITA Women. The brand BONITA Men will be taken
off the market.

Furthermore, the TOM TAILOR GROUP is going to withdraw from France and
South Africa and revisit the go-to-market approach in China and India (e.g.
licensee models). At the same time, the Group will bring about further
reductions in its network of branches. The company projects that the
portfolio will be reduced by up to 300 stores in the business year 2017.
This means that all the stores for the BONITA Men brand will close.
Moreover, up to 150 unprofitable stores of the BONITA Women brand will be
closed. Individual flagship stores of the TOM TAILOR brand will also be
subject to a thorough review and removed from the portfolio if they do not
meet their profitability targets. These measures will be associated with a
reduction in the number of jobs. Over the coming weeks, socially acceptable
solutions will be developed in collaboration with the works councils of the
Group.

Media and Investor Contact

Felix Zander
Head of Investor Relations & Corporate Communications
TOM TAILOR GROUP
Phone: +49 (0) 40 58956-449
Email: felix.zander@tom-tailor.com


20.10.2016 The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de

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Language:     English
Company:      TOM TAILOR Holding AG
              Garstedter Weg 14
              22453 Hamburg
              Germany
Phone:        +49 (0) 40 589 56 0
Fax:          +49 (0) 40 589 56 398
E-mail:       info@tom-tailor.com
Internet:     www.tom-tailor-group.com
ISIN:         DE000A0STST2
WKN:          A0STST
Listed:       Regulated Market in Frankfurt (Prime Standard), Hamburg;
              Regulated Unofficial Market in Berlin, Dusseldorf, Hanover,
              Munich, Stuttgart, Tradegate Exchange
 
End of Announcement                             DGAP News-Service
 
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