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Ralph Lauren Corporation has taken additional pre-emptive actions to preserve cash and strengthen its liquidity while navigating the evolving global pandemic. The company said in a statement that measures include managing its expense structure across all key areas of spend, reducing or delaying capital expenditures and aligning inventories to anticipated demand; drawing down 475 million dollars from the company’s Global Credit Facility to bolster cash balances; halting any incremental share repurchases during the Covid-19 crisis, and pausing all non-critical capital build-out and reviewing all real estate projects.
“As we navigate the evolving impacts of Covid-19, we are addressing the acute crisis while ensuring that the strength of our global business endures over the long-term, as it has for more than 50 years,” said Patrice Louvet, the company’s President & CEO, adding, “In this challenging global context, we will prioritize the areas where we can have the greatest impact.”
##Ralph Lauren to donate masks and isolation gowns As announced on March 26, 2020, in response to Covid-19, the Ralph Lauren Corporate Foundation is committing 10 million dollars to help its teams, partners and communities impacted by the novel coronavirus pandemic. The company said Ralph Lauren Corporate Foundation’s commitment of 10 million dollars will provide financial grants through the Emergency Assistance Foundation for Ralph Lauren colleagues facing special circumstances like medical, elder care or childcare needs; contribute to the World Health Organization Covid-19 Solidarity Response Fund, a global effort supporting countries to prevent, detect and respond to the pandemic; build on the company’s 20-year commitment to cancer care through our Pink Pony Fund by supporting our long-standing network of international cancer institutions that are caring for people with cancer who are especially vulnerable at this time; and commit an inaugural gift to the Council of Fashion Designers of America (CFDA) / Vogue Fashion Fund for Covid-19 relief to support the American fashion community impacted by the pandemic.
In addition, the Ralph Lauren Corporation is starting the production of 250,000 masks and 25,000 isolation gowns for donation with our U.S. manufacturing partners.
Following temporary closures of its offices, stores and fulfilment centres around the world, Ralph Lauren said, it will continue to assess its operations on a location by location basis – heeding the advice of local governments and global health organizations to determine when to return each location to business. Distribution centre operations will re-open on April 1, 2020, at which time Ralph Lauren will resume normal shipping of digital and select wholesale orders.
Picture:Ralph Lauren newsroom
New Look has appointed Stuart MacKenzie to its board as a non-executive director, replacing John Gnodde who stepped down on 1 March.
MacKenzie has been the CEO of Ethos Private Equity since 2014 and has experience working with portfolio companies across various industries and all aspects of the private equity and venture capital value chain.
New Look non-executive chairman Alistair McGeorge said in a statement: “On behalf of the board I would like to thank John for his support and contribution to New Look over the last five years. We wish him all the best in his future endeavors.
“I am delighted to welcome Stuart to the board. We look forward to working with him and benefitting from his expertise.”
The news comes as New Look, like numerous other fashion companies, struggles to cope with the impact of Covid-19. Last week, the retailer halted its production and requested a three-month rent holiday from its landlords to minimise the impact of the pandemic on the business.
Photo credit: FashionUnited
According to preliminary, unaudited results, Tom Tailor Holding SE reported revenue decline of 4.8 percent to 803.1 million euros (882 million dollars) due to continued decrease in revenue at Bonita amid the difficult market situation as well as further planned store closures in this segment. The company said in a statement that revenue generated by the Tom Tailor brand rose slightly year on year, by 0.4 percent to 620.3 million euros (681.7 million dollars). The company anticipates large revenue decline across markets in 2020 due to the continuous spread of coronavirus and its negative impact on the business.
“Fiscal 2019 was in line with our expectations. We were able to grow the Tom Tailor brand once again and we returned in particular to an increase in revenue in our own retail business for the first time in three years. At the same time, we succeeded both in slowing the decline in revenue and improving the income situation at Bonita,” said Dr Gernot Lenz, CEO of Tom Tailor Holding SE.
Tom Tailor retail segment revenues return to growth
The company said, revenue of the Tom Tailor retail segment increased due to a positive trend in stationary retail as well as in e-commerce, with growth of 2.9 percent to 291.1 million euros (319.5 million dollars), while revenue in e-commerce was up 6.5 percent to 50.4 million euros (55.3 million dollars). The company’s like-for-like sales also increased by 0.9 percent compared to the previous year.
The company added that gross profit margin within the group, at 57.9 percent, was approximately on a par with the previous year’s level of 58.1 percent. Reported group EBITDA was 98.5 million euros (108.2 million dollars) compared to the previous year’s figure of 25.7 million euros, while adjusted group EBITDA was 33.7 million euros (37 million dollars). The Tom Tailor brand’s adjusted EBITDA of 56.5 million euros (62 million dollars), were below the previous year’s level of 64 million euros, while the adjusted EBITDA margin amounted to 9.1 percent, compared to 10.3 percent in fiscal 2018.
Revenue at the Tom Tailor wholesale segment dropped in 2019 by 1.8 percent to 329.2 million euros (430.6 million dollars). Also adjusted EBITDA decreased significantly to 44.8 million euros (49.2 million dollars).
In fiscal 2019, the Bonita segment posted a decline of 19 percent in revenue to 182.8 million euros (200.6 million dollars). The segment’s gross profit margin improved by 1.6 percentage points to 63.7 percent, while adjusted EBITDA improved to negative 22.7 million euros compared to negative 38.2 million euros in 2018.
Corona crisis impact on Tom Tailor’s fiscal 2020 performance
Tom Tailor Group stores are closed in most European markets due to the continuing spread of the coronavirus. The company said, ongoing business with large customers (wholesale) is also considerably impacted by the restrictions imposed by the respective European governments. While online retail and wholesale offerings continue, the company said that the online activities do not generate a large enough share of overall revenue, so they cannot compensate for the losses in revenue in the company’s own retail and wholesale businesses.
Due to the worsening of market conditions in almost all markets relevant to the Tom Tailor Group and the associated risks for the financing and liquidity situation of the group, Tom Tailor said, the executive board rates short-term and medium-term liquidity planning as significantly risky, which include the risk of non-fulfilment of key lending indicators as well as the risk of liquidity bottlenecks.
“The corona pandemic has led to a dramatic deterioration in market conditions in recent weeks in all of our markets. Therefore, we are putting all our efforts into taking countermeasures to minimise the economic damage for the group, added Christian Werner, CFO of Tom Tailor Holding SE.
Picture:Tom Tailor newsroom
Global Fashion Group S.A. (GFG) has said in a statement that after trading in line with expectations until mid-March, GFG has seen a significant negative impact on customer demand across all 17 countries of operations. Therefore, the company is withdrawing its financial guidance for the current year, which excluded the negative effect of coronavirus. The company had earlier said that in 2020, it aims to grow NMV between 17-20 per cent, delivering more than 2 billion euros in NMV and in the region of 1.5 billion euros revenue at constant currency. GFG had also said that it plans to make significant progress on the path to profitability in 2020, with the target of being profitable at an adjusted EBITDA level no later than 2021.
The company is experiencing the temporary closure of its fulfilment centres in the Philippines and Argentina as part of government measures to contain the COVID-19 virus. These two countries together contributed 6 percent of its 2019 NMV. The company added that there is a possibility that GFG’s fulfilment centres in other countries may be temporarily closed as it complies with future government restrictions and adapts its business to the evolving circumstances.
In addition, the company said, due to the spread of the coronavirus in Europe, GFG will postpone the company’s annual general meeting scheduled for May 22, 2020 in Luxembourg.
Picture:Global Fashion Group newsroom
Monsoon Accessorize has announced its trading has been “badly affected” by Covid-19 and as a result is mulling a potential sale of the business.
The company said it had been trading well up until the impact of the coronavirus pandemic took its toll on the industry, indicating that the Company Voluntary Arrangement (CVA) it launched last year after a period of poor trading was starting to show positive results.
The retailer currently employs around 3,500 people.
A spokesperson said: “Monsoon and Accessorize were trading well until the start of March, ahead of last year and ahead of the financial plan set out at the time of last year’s CVA. In common with all other fashion retailers, trading since then has been badly affected by the outbreak of Covid-19, with the company facing significant pressure on revenues after shutting all of its stores.”
Monsoon Accessorize feels Covid-19 impact
The spokesperson continued: “As a result the board is looking at a range of options to secure the business’s long-term future in these exceptionally difficult times. These options include a potential sale of some or all of the business. No decisions have been made about the timing or nature of any steps the business may take.”
The company has reportedly called in restructuring experts from FRP Advisory to look over potential options for the business.
In July 2019, Monsoon Accessorize won approval from its creditors to seek rent cuts in over half of its stores as part of a restructuring plan.
As part of the strategy, founder and owner of the business Peter Simon provided the company with a 30 million pound. The company also offered landlords up to 10 million pounds if it turned back to profit in the future.
Photo credit: Monsoon, Facebook
Tom Tailor SE has announced that it will publish the preliminary results for fiscal 2019 rather than the full financial statements as originally planned owing to the significant worsening of market conditions in almost all markets relevant to the Tom Tailor Group due to the corona crisis and the associated risks for the financing and liquidity situation of the group. Tom Tailor also expects significant decline in revenue and earnings for the first quarter of 2020.
The company said in a statement due to the level of insecurity about further developments on the sales markets, it executive board rates short-term and medium-term liquidity planning as significantly risky. These risks, the company added, include the risk of non-fulfilment of key lending indicators as well as the risk of liquidity bottlenecks.
The group has closed its own stores in most European markets due to the ongoing spread of the coronavirus and in compliance with the rules laid out by governments and regional authorities. The company said, business with large customers (wholesale) is also significantly impacted by the restrictions laid down by the different European states.
Picture:Tom Tailor newsroom
Zalando SE expects its results for the first quarter to be significantly below the analysts’ consensus of March 11, which did not yet take into account the effects of the coronavirus. The company said in a statement that this is due to lower discretionary spending by European consumers as a result of the measures taken by European governments since March 9 against the spread of the coronavirus.
The company expects revenue and gross merchandise volume (GMV) growth to be significantly below the analysts’ consensus of March 11, despite a strong start to the year. The company added that adjusted EBIT is also negatively impacted by lower sales growth in the first quarter and an exceptional write-down of inventories as a result of the revised sales expectations for the current season.
The median of the analysts’ consensus as of March 11, 2020 was 19 percent for revenue growth, 22.8 percent for GMV growth and adjusted EBIT of negative 28 million euros. Based on the current situation, the company assumes that the published forecast cannot be achieved.
Save The High Street, an organisation that aims to support local retailers with tools, skills, and digital capabilities, is launching a 12-week Covid-19 support programme to help those struggling with the impact of Covid-19.
The pandemic has caused unprecedented disruption to the already struggling UK high street, with the government last week ordering the closure of all ‘non-essential’ stores across the country in an effort to slow its spread.
Throughout March, Save The High Street has spearheaded a research project with input from dozens of high street business owners and industry experts to find out what they can do to succeed during these difficult times. Now, the organisation is launching an end-to-end Covid-19 support programme to help local businesses do just that.
The organisation will work closely with select companies for 12 weeks to develop and implement personalised plans, and will offer help in areas such as negotiating with landlords and suppliers; setting up and optimising e-commerce sites; applying for grants and loans; offering local delivery and hosting virtual events; and helping develop new forms of community engagement and digital marketing.
Save The High Street said it will be using its digital assistant app called Jo to ensure the support can be delivered remotely and affordably across the UK. Local businesses based in the UK can register for the programme at JoinJo.com.
Additionally, the organisation will be launching an email newsletter to keep recipients up-to-date with all the latest tips and strategies concerning the ever-evolving Covid-19 situation.
According to Save The High Street, approximately 500,000 high street outlets across 7,500 high streets should now be implementing plans to survive during the pandemic, though 50 percent of them are currently unprepared to achieve the transition plan on their own.
Alex Schlagman, a founding partner of Save The High Street, said in a statement: “The high street will never be the same again, but it is not dead. Diverse, successful high streets benefit us all and to ensure that future, we will need an army of successful local independents. The SaveTheHighStreet.org Covid-19 support programme exists to ensure every local business in the UK has the best chance of success through these unprecedented times.”
Photo credit: FashionUnited
British property giants Hammerson and Intu have both announced they have received just a fraction of the rent payments they were expecting to collect from their store portfolios as Covid-19 continues to disrupt the retail industry.
Hammerson, which owns Bullring shopping centre in Birmingham, said that two days after its rent deadline it had received only 37 percent of payments from its properties and stores in the UK.
Adjusted for rent that has been deferred, switched to monthly payment, or waived, Hammerson received 57 percent of due rent. “We anticipate both figures to increase as temporary agreements are implemented and further cash is collected,” the company said.
The news comes after last week prime minister Boris Johnson announced the immediate closure of all ‘non-essential’ stores across the UK in an effort to curb the spread of the coronavirus.
Hammerson said in its update: “In these circumstances, we believe we should support our occupiers, particularly smaller and independent brands that are less resilient to the closure of their space in our centres. We have received a variety of requests for rent deferrals, monthly payments, and waivers, which we are reviewing on a case-by-case basis, taking into account the business model and risk profile of the occupier, alongside the aid made available by the relevant governments.”
Similarly, British shopping centre operator Intu, which owns Manchester’s Trafford Centre and Lakeside in Essex, announced last week that for the second quarter of the financial year it had received just 29 percent of due rent. For the same period last year, it had received 77 percent by that time.
Intu said in a statement: “The reduced social activity is likely to continue for the foreseeable future impacting our footfall and potential future rents. The impact of the reduced rents received is expected to require us to seek covenant waivers and we are in constructive discussions with the relevant lenders.”
The company said that as of 24 March, it had immediately available cash and facilities of 184 million pounds at the corporate level.
Photo credit: Grand Central, Hammerson
Mothercare has announced that it has made “significant progress” with its ongoing transformation strategy but has been directly impacted by Covid-19.
At the end of last year, the maternity and babywear specialist announced plans to transform the business and generate revenues through an asset-light model, operating in over 40 international territories.
The company said in a trading update on Monday: “We continue to make significant progress with those plans and have substantially completed our transition to refocus the group on our core competencies of brand management and the design, development and sourcing of product to grow the Mothercare business with our global franchise partners.”
However, the business said it has seen “direct consequences” from Covid-19, with particular disruption to its franchise partners and suppliers which will “lead to a material impact on Mothercare’s short-term revenues.”
The company said that while many of its key head office staff can work efficiently from home, a number of its retail workers cannot, which has resulted in “incremental” operating costs for the group.
Mothercare said it will seek to utilise tax reliefs and other forms of financial aid announced by the government when they are made available.
In December, Mothercare entered into an agreement for Boots to become its exclusive franchisee. The company said that although it remains “on track” with finalising the details of the arrangement, there have been delays caused by Covid-19, and it now expects the contractual arrangements to finalised in late spring, with a wider Mothercare product offer to be available online and in Boots stores from late summer 2020.
The company added that it has achieved a substantial reduction in bank debt and remains in discussions with a number of debt providers regarding entering into new debt facilities.
Mothercare chairman Clive Whiley said in a statement: “In the current circumstances, we have activated our contingency plans to deal with the challenges that we and others are facing in the current global crisis, focusing on the well-being of our colleagues alongside our ongoing business and corporate liquidity. We continue to enjoy the support of our key stakeholders and financing partners and we are very grateful to them at this unprecedented time.
“We believe that the intrinsic value of our brand, the close contact fostered with our key stakeholders over the last two years and our seamless, deep understanding of the Group's new trading cash flow dynamics, honed over the last six months, will prove to be extremely valuable.
“At this time we believe that our efforts should be focused on helping to preserve the businesses of our franchise and manufacturing partners through even more collaborative ways of working, to ensure both the short term liquidity of our business together with our return to longer-term profitability. We are already seeing the benefits of this approach being brought to bear.”
Photo credit: Mothercare UK, Facebook