MADRID May 9 Spanish clothing retailer
Cortefiel said on Tuesday sales and core earnings
rose during its latest financial year as its private equity
owners explore a sale of the business.
However, the retailer, whose brands include underwear chain
Women's Secret and preppie label Springfield, registered a loss
of 24 million euros ($26 million) in the year to the end of
February after it invested on rearranging stores, closing bigger
ones to focus on smaller retail spaces.
"We hoped to be in profit this year, but the consolidation
process we started last August has pushed back this target to
next year," said Chief Executive Officer Jaume Miquel in a
briefing with reporters. He took over in August 2016.
Originally a family business founded more than 100 years
ago, Cortefiel was bought in 2005 by private equity firms PAI
Partners, CVC Capital and Permira, just two years before Spain's
boom years of credit-fuelled high spending came to an end.
Goldman Sachs is running the sale of the company on behalf
of the three funds, according to sources. Goldman Sachs and the
private equity owners have all declined to comment on the
CEO Miquel said on Tuesday that an investment bank had been
hired in relation to a process involving the future of the
company, without providing more details.
He said the aim was to find a solution to give the company
financial stability and a solid shareholder ownership before
March next year when 1.4 billion euros of syndicated bank debt
The retailer said sales rose 3.1 percent to 1.13 billion
euros in the year to Feb. 28 while earnings before interest,
tax, depreciation and amortisation (EBITDA) came in at 114.69
million euros, an increase of 6.7 percent.
Sales had improved as the company, which is present in 90
countries including Mexico and Russia, rowed back on a strategy
to make the brand more appealing to younger shoppers and focused
on the target clientele aged from 45 to 55, Miquel said.
Core profit, excluding one-offs, jumped by more than half
from October to March, the company said. Summer season clothing
for sale on its website include a flowing, floral blouse for
59.99 euros and a waterfall lapel blazer for 79.99 euros.
Cortefiel, where Spain accounts for just under half of core
earnings, has been through a number of financial restructurings
since 2005. The last was in March 2014 when the company extended
debt which falls due next March.
($1 = 0.9181 euros)
(Editing by Keith Weir)