The main shareholder and Member of the Redan Supervisory Board offered to provide financing of up to PLN 10 million for the purchase of Top Secret’s new collection. As indicated in the financial report for 2019, the Group posted revenue of PLN 367 million in the previous year. However, this year, as a result of the COVID-19 epidemic the fashion chain’s development plans had to be revised. Thanks to the changes in the collection development strategy, among other things, the sales margin and sales are expected to grow consistently in the coming months.
Radosław Wiśniewski, the main shareholder of Redan (holding 45.8% of the total vote at the General Meeting) and a Member of the Supervisory Board, declared to provide up to PLN 10 million needed to purchase a new collection of Top Secret. He also stressed that his decision was subject to approval by financial institutions of the extension of financing provided to Redan S.A. and Top Secret Sp. z o.o.
The Redan Group also summarised its 2019 financial performance. It recorded revenue of PLN 367 million, which was about one-third less than in 2018. Such considerable drop was primarily attributable to loss of control by Redan S.A. over TXM S.A. w restrukturyzacji (subject to restructuring) as of 18 July 2019. Total comprehensive income attributable to owners of the parent in 2019 was PLN -44.5 million, having remained relatively flat over the year before. In turn, Top Secret, a fashion chain whose development is currently the primary focus of the Redan Group’s strategy, posted revenue of PLN 243.4 million in 2019, which fell slightly compared to the year before.
“Last year, we revised our planning model, collection design rules and pricing policy, on the one hand to ensure a more balanced order size and more commercial nature of collections, and on the other hand to generate a higher sales margin. The measures taken should take full effect in the spring-summer 2020 collection. Due to the COVID-19 epidemic and the resulting lock-down, followed by a collapse of sales, we cannot make a direct year-on-year data comparison, but we can say we are satisfied with the results recorded in May and June,” said Bogusz Kruszyński, the President of the Management Board of Redan.
In connection with the COVID-19 epidemic the Redan Group modified its sales plans for 2020 and 2021. “We expect sales at Top Secret stores in Poland to drop 41% compared to 2019. However, revenue in May and June 2020 exceeded the planned figures by approximately 6% and 19%, respectively. The margin generated in May was consistent with the assumption in the adjusted sales plan for 2020, and in June it was even higher by some 5 pp. Thus, the results indicate that the modified plan for 2020 is being realised and the changes in the collection produce the desired outcome,” stressed Bogusz Kruszyński. He added that the results for May and June confirmed the potential to effectively compete on the market. This is supported by supply of goods on a just-in-time basis which has been ensured for many years to improve flexibility in reacting to changes in demand and customers’ needs. Such approach also limits the risk of overstocking at the end of the season.
“The COVID-19 pandemic made us revise our previous plans concerning the growth of the distribution network. At present, it cannot be stated reliably that the pandemic has been contained and the number of new infections will not grow. As a result, we decided to adopt a prudent strategy based on monitoring of the business environment and being at the ready to further reduce operations, if necessary,” stated the President of the Redan Management Board. The expected improvement in performance in subsequent months is based on the planned increase in sales margin, gradual rise in sales, cost reduction and lack of non-recurring events seen last year. “We expect the Redan Group’s performance to improve compared to the last year, and we should get closer to the EBITDA profitability ratio” – concluded Bogusz Kruszyński.