Tom Tailor establishes JV with Sportina

15 Nov '10

3 min read

The international lifestyle company TOM TAILOR is vigorously expanding its international retail network. The TOM TAILOR Group has established a joint venture with Sportina Bled D.O.O of Lesce, Slovenia as of October 1st, 2010. This strategic alliance is intended to drive retail expansion in Southeast Europe, including Croatia, Slovenia and Serbia.

As a result of this, TOM TAILOR will take-over the existing 23 franchise stores within the context of the joint venture and with the final aim of operating them as full own-retail stores. Five more retail stores will be added this year in cities such as Zagreb, Split and Ljubljana. Another 20 new stores will join them by the end of 2013. The take-over will result in the fashion company TOM TAILOR owning an aggregate of 147 retail stores per end of October 2010. This thereby entails a considerable growth of 51 retail stores since June 30th, 2010.

"For years, Sportina has been an ideal partner for our expansion offensive in Southeast Europe. The joint venture represents the next logical step in expanding synergies further, vigorously driving our internationalization and expanding TOM TAILOR's market position," says Dieter Holzer, Chairman of the TOM TAILOR Group.

TOM TAILOR holds 51 percent of the shares and Sportina has 49 percent. The purchase price of the 51 percent shareholding is €5 million. Of that total, €2 million is payable immediately and €3 million by December 31, 2013. Due to the controlling influence exercised by TOM TAILOR, the joint venture will be fully consolidated within the TOM TAILOR Group, with the minority interest reported separately. In 2009 the 23 franchise stores generated revenue of €8.4 million and EBITDA of €2 million.

Since the beginning of 2000, Sportina has been the exclusive distribution partner of the TOM TAILOR brand for all of southeast Europe and will continue to operate TOM TAILOR's wholesale business in the region. The purpose of the new joint venture partnership is to continually drive forward the strategic expansion of the controlled retail areas.

Sportina was previously the exclusive TOM TAILOR distributor for all of Southeast Europe, and will continue to handle the TOM TAILOR wholesale business in this territory. The two partners have been working together closely since 2000. The new partnership will steadily drive the strategic expansion of controlled retail space. It focuses mainly on opening retail and monolabel stores in medium-sized cities and metropolitan suburbs.

The Hamburg headquarters will oversee all the space management centrally, in order to position products to maximum effect and respond quickly to changes at the point of sale. The fashion company will be leveraging its partner's strength as a one-stop shop for all the market requirements for sustainable growth, from excellent market knowledge to optimal space procurement, through a select portfolio of trading partners. This move enables the lifestyle company, which has been listed on the stock exchange since March, to strengthen its strategy for long-term growth and expand its international networks even further.

TOM TAILOR HOLDING AG