DGAP-News: TOM TAILOR GROUP initiates cost reduction and

DGAP-News: TOM TAILOR Holding AG / Key word(s): Miscellaneous TOM TAILOR GROUP initiates cost reduction and efficiency program 'CORE' to increase competitiveness 09.11.2015 / 18:21 --------------------------------------------------------------------- PRESS RELEASE TOM TAILOR GROUP initiates cost reduction and efficiency program "CORE" to increase competitiveness - Focus on core brands and closing of TOM TAILOR POLO TEAM and TOM TAILOR Contemporary Men - Return-based evaluation of the sales organization across countries and channels - Leaner, streamlined organization with personnel reductions in administrative functions planned - Reduction of operating costs - Strategy unchanged: long-term profitable growth through accelerated verticalization Hamburg, 9. November 2015. The TOM TAILOR GROUP initiates its comprehensive, multi-year cost reduction and efficiency program "CORE" to focus on its core competencies. With this initiative, the company is addressing the far-reaching and rapid structural transformation of the textile industry. The goal is to increase efficiency and accelerate processes while improving the cost base in order to enhance the company's long-term competitiveness. "The effects of globalization and digitalization have brought far-reaching changes to the textile market, and customer needs are rapidly shifting. Dynamism, efficiency and flexibility will be even more crucial to competitiveness in the future. With our envisaged program we will speed up our processes and streamline our structures. This will further boost the performance potential of our retail and partner spaces," said Dieter Holzer, the CEO of TOM TAILOR Holding AG. The "CORE" program is intended to generate additional contributions to earnings. The company expects to realize the full financial impact of the cost reduction measures, amounting to at least EUR 10 million per year, from 2018 onward. Within the framework of the cost reduction and efficiency program, the Group plans to pare back its brand portfolio, and in the future focus on the strong core brands TOM TAILOR, TOM TAILOR Denim and BONITA. Consequently, the TOM TAILOR POLO TEAM brand and the TOM TAILOR Contemporary Men line are scheduled to be withdrawn from the market in the summer of 2016. Moreover, the TOM TAILOR GROUP intends to streamline its sales organization in terms of countries and sales channels. In that regard, the company plans to further optimize its retail network by closing less profitable stores. Against this backdrop, it will also adjust its rate of expansion. In 2016, up to 30 new stores are scheduled to be opened, as compared with 115 openings in 2015. Another proposed measure of the "CORE" program is a review and assessment of all operating costs. As a first step, all material costs will be reviewed and options evaluated to reduce the rental and logistics costs. In the course of the focusing initiatives, the company's workforce capacity will be reduced, realizing cost savings of EUR four to five million. Following initial soundings and information, there will be discussions with the works council over the next weeks so as to arrive at solutions compatible with social priorities. "By lowering our break-even-threshold and through the resulting improvement of our earnings potential, we are responding to the increasing volatility in the market. As a result, we are positioning the TOM TAILOR GROUP for sustainable and profitable growth and thus make our company weatherproof," said Dieter Holzer. With the "CORE" program, the TOM TAILOR GROUP is creating a powerful platform with strong core brands and cost-efficient structures and processes. This is an essential prerequisite for continuing to move ahead with the verticalization and positioning of the Group for profitable growth on a long-term basis. About TOM TAILOR GROUP TOM TAILOR GROUP is an international fashion and lifestyle company offering stylish clothing and accessories in the medium price range through its brands TOM TAILOR and BONITA. The TOM TAILOR brand comprises the brands TOM TAILOR, TOM TAILOR Denim, TOM TAILOR POLO TEAM and TOM TAILOR CONTEMPORARY. Its collections are aimed at a target group aged between 0 and 40 and are distinguished by premium quality. BONITA, one of Germany's leading fashion brand producers and retailers, has been a part of TOM TAILOR GROUP since August 2012. BONITA sells menswear and womenswear collections for the over-40 age group. In the fiscal year 2014, the TOM TAILOR GROUP recorded sales of EUR 932.1 million, of which EUR 324.9 million were generated by BONITA. The TOM TAILOR brand is sold through the segments Retail and Wholesale, thus via own mono-label stores as well as via partners. At the end of June 2015, these comprised 405 TOM TAILOR stores, 209 franchise stores, 2,762 shop-in-shops and around 9,800 multi-label points of sale. Therewith the brand is present in 35 countries. BONITA operates 1,018 retail stores of which 85 are BONITA men stores, as well as one shop-in-shop area since September 2015. Furthermore, the collections of both brands are available over the respective online stores. Information also under www.tom-tailor-group.com and www.bonita.eu Media- and Investor contact Felix Zander Head of Investor Relations & Corporate Communications TOM TAILOR GROUP Telephone: +49 (0) 40 58956-449 Email: felix.zander@tom-tailor.com Erika Kirsten Manager Corporate Communications TOM TAILOR GROUP Telephone: +49 (0) 40 58956-420 Email: erika.kirsten@tom-tailor.com --------------------------------------------------------------------- 09.11.2015 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- 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 Indices: SDAX Listed: Regulated Market in Frankfurt (Prime Standard), Hamburg; Regulated Unofficial Market in Berlin, Dusseldorf, Hanover, Munich, Stuttgart End of News DGAP News Service --------------------------------------------------------------------- 410401 09.11.2015