Top Secret’s sales fell, although its margin climbed

Despite the resumption of trade at shopping centres, the number of customers visiting Top Secret stores in May halved year on year. In effect, sales declined, although the effectiveness of stores improved. The purchase rate at Top Secret stores increased. Lower markdowns and a larger share of items from the current collection also helped push the sales margin higher.

Sales of Top Secret products in May 2020 totalled approximately PLN 9m, having dropped some 48% year on year. Top Secret’s cumulative year-to-date revenue was approximately PLN 44m, down some 51% relative to the corresponding period of the previous year.

In May, sales at Top Secret stores in Poland were PLN 7m, having dropped 47% relative to that recorded in the previous year, with the size of the sales network lower by 7% year on year. Despite the resumption of trade in shopping centres and opening of almost all stores, sales have suffered a significant drop year on year. Visits at stores were halved, which was only partly offset with their greater efficiency in terms of a higher ratio of receipts to number of customer visits. On the positive note, we posted an increased gross margin due to lower prices of the current collection and lower markdowns on previous season items”, said Bogusz Kruszyński, the President of the Redan Management Board.

Revenue from the sale of merchandise through the Top Secret online store in Poland totalled PLN 1.3m in May 2020, down 48% over May 2019. Cumulatively, revenue generated by the Top Secret online store in Poland stood at PLN 8.5m and was lower by approximately 40% year on year. “In May, as in the previous months of this year, the decline in sales was mostly due to a significantly limited offer of items from the autumn/winter 2019 season. In the previous year, after the autumn/winter 2018 season we had a relatively large stock of unsold items, which were sold in the online store with significant markdowns. In May 2020, we posted a higher share in sales of products from the current spring/summer season, thanks to which – despite a general drop in revenue – we managed to generate the same volume of sales margin in e-commerce,” added Mr Kruszyński.

As at the end of May 2020, the retail space of chain stores selling Top Secret, Troll and DryWash brand products was 30.1 thousand m2, down 20% compared to the end of May 2019. 58% of the reduction stemmed from store closure or loss of control of stores located abroad. The reduced stock from previous seasons also caused the outlet chain to shrink.

Following the loss of control over TXM S.A. w restrukturyzacji (subject to restructuring), as of 18 July 2019 its revenue data is not published by the Redan Group.