Agreement with banks: Tom Tailor can hope for fresh money
Tom Tailor's chances for longer-term financing have increased. By the end of October, the contract with major shareholder Fosun and several banks to be completed. The management probably has no future.
The ailing German fashion chain Tom Tailor comes closer to a long-term secured financing. The company has agreed on a new financing structure with its syndicate banks and Chinese majority shareholder Fosun. This was announced by Tom Tailor in Hamburg.
The cornerstone agreement with a term until the end of September 2022 envisages a total volume of 365 million euros and is intended to secure the long-term financing of the Tom Tailor Group. However, the promise is not yet final: it should be finalized by the end of October, it said.
At the same time, the fashion chain corrected preliminary figures for the financial year 2018, as provisions had risen due to a future deterioration in business.
Screwed down profit forecast
For example, the company expects Tom Tailor's final operating profit (before interest, taxes, depreciation and amortization) for 2018 to be as low as € 64 million instead of € 70.6 million, as initially projected. The operating loss of the subsidiary Bonita is expected to grow from 24.6 to 38.2 million euros.
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The fashion chain had recently gained time in the struggle for a refurbishment. The agreement on bridge financing with syndicate banks was extended in August, initially until mid-September and a month later until the end of October. The problem is the subsidiary Bonita, which Tom Tailor took over eight years ago; a planned sale had last failed.
Meanwhile, Tom Tailor may soon have to seek a new leadership. The Supervisory Board is holding talks with CEO Heiko Schäfer and CFO Thomas Dressendörfer "with regard to leaving the company prematurely," the company announced on Tuesday evening. According to company circles, the talks are said to be "completely independent of the situation of the company".