Because Tod’s in Della Valle is no longer luxurious
Tod's accounts and the agreement for a loan from Intesa Sanpaolo. Fiorina Capozzi's article
Diego Della Valle did not go for luxury. For his Tod's, 2020 is a year to forget with a 30 percent drop in turnover. Nothing to be surprised about according to Mediobanca Securities analysts. “Strong growth in China and e-commerce were not enough to compensate for Europe's weakness. The cautious message from the company due to poor visibility over the next few months has prompted us to maintain a neutral valuation on the stock ”, the experts from Piazzetta Cuccia explained in the Italian Wake-up call on 28 January.
TOD'S BUSINESS TOUR
All the fault of the pandemic that has changed the cards also for fashion. With Tod's 2020 turnover that stopped at 637.2 million. In the last quarter of 2020 alone, revenues slipped to 184.5 million, with a decrease of 22.6 percent.
TOD'S NOTE
"The results of the fourth quarter show a strong unevenness in the different areas of the world: China continued to grow in double digits, while the Western world, after a modest improvement in October, suffered a further slowdown due to further lockdowns imposed by local governments to deal with the worsening of infections ”, Della Valle specified in a note.
HOW IS FASHION GOING
There is no doubt that all luxury brands have suffered. Even the giant LVMH which recorded a drop in sales of 17 percent in 2020. But, despite suffering a 34% drop in profits, he managed to make 4.7 billion net profits by promising shareholders a six-euro dividend for 2020.
CUTTING COSTS IN TOD'S
While waiting for better times, Tod's thought it good to focus on cost cutting. Including financial ones.
WHAT INTESA SANPAOLO WILL DO AT TOD'S
The board of directors therefore decided to sign a loan agreement with a pool of banks coordinated by Intesa Sanpaolo, through the Imi corporate and investment banking division, for a total maximum amount of 500 million.
THE TERMS OF THE FINANCING
“The“ sustainability linked loan ”is divided into a term facility of 250 million and a revolving credit facility of a further 250 million and has a duration of five years”, pointed out a note from the group.
WHAT THE TOD'S COMMUNICATION SAYS
“This operation further strengthens the already solid financial structure of the group, mitigating the risk profile linked to the current market situation and introduces a reward mechanism linked to the achievement of specific ESG objectives. Simultaneously with the disbursement of the Term part, the Company will repay all the pre-existing medium-term loans and pay off the previous RCF lines ", explained the company, recalling that the final data for the last year will be approved by the board of directors on 10 March 2021.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-tods-a-della-valle-non-va-di-lusso/ on Thu, 28 Jan 2021 10:26:20 +0000.