German fashion chain Tom Tailor has reached an agreement on financial support with its creditors and the German government. The ailing company will receive an additional loan of 100?million euros with a state guarantee.
In addition to the additional credit line, the banks have agreed to extend the existing financing (amounting to some 335?million euros) until September?2024. The additional funds should guarantee the further development of the fashion label.
Tom Tailor brand is "ready for a kick-start, and we intend to make good use of this opportunity", managing director Gernot Lenz said in a press release. The brand wants to invest in the quality of its products and focus more on sustainability. Furthermore, the label wants to focus more on new markets in Southeastern Europe and stimulate online sales. It will also build an extensive efficiency programme in the coming months.
The new loan does not mean that all problems at Tom Tailor Group are now suddenly solved: its sister brand Bonita is not eligible for financial support and is forced to apply for creditor protection. That procedure will not affect the development of the Tom Tailor brand, which can continue as planned, the group states. Tom Tailor employs 3,400 people. Bonita has 2,400 employees.