Still being midway in the implementation of the restructuring plan CORE, the Tom Tailor Group has approved an exceptional array of new cost-cutting measures which aim at getting rid of unprofitable foreign markets, retail stores and product lines.
In terms of brand portfolio, the group will take off the market Bonita Men and concentrate on the company’s umbrella brand Tom Tailor and on Bonita Women. Parallel to this, the fashion firm is pulling out from the French- and South African markets and revisiting the go-to-market approach in China and India (e.g. licensee models).
The store portfolio will be reduced by up to 300 stores in the business year 2017, including all the Bonita Men dedicated stores that the company currently runs. Additionally, around 150 unprofitable Bonita Women stores will be closed and individual Tom Tailor flagships are subject to be financially reviewed and removed if necessary. An undermined number of jobs will be cut.
The implementation of these extraordinary cost-cutting measures will cost around €70 million in the third quarter of 2016, primarily non-cash expenses. The group expects that the fourth quarter of 2016 will already display first positive effects in the EBITDA and forecasts that profitability will significantly be improved in 2017.