Tous Grows 18% Thanks to Spanish Recovery

The entrance of the venture capital fund Partners Group as shareholder has been great for Tous. The Catalan company grew 18% in 2015 thanks to the recovery of the business in Spain.

Leeson. 26/02/2016

Tous´revenues last year reached €368 million, representing an increase of 18% over the previous year. The income has benefited from the recovery of the business in Spain, which has grown by 13% after several difficult years. Domestic markets accounts for half of its income. Although the firm has no published individual results for every division, it reiterated that the jewelry remains the main source of income, with two thirds of the total.

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Tous 2016 Spring/Summer Collection. Click to buy

In 2015 Tous family sold a 25% stake to private equity fund Partners Group, in order to finance its expansion. The company has met expectations: has opened 50 stores during the year, bringing the total to 500 stores in almost 50 countries (of which 212 are in Spain). The aim of Tous is open 55 to 70 stores a year to double its global presence in five years, with a focus on China, Italy and the United States. This expansion will enable revenues to grow at least 10% annually over the next five years, which would reach around €600 million in 2020.

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Tous 2016 Spring/Summer Collection. Click to buy

Tous family is clear that these objectives will be achieved by organic means, without acquisitions. Also they are clear that they want to maintain their positioning. Increasing the popularity of their products could be a problem in the medium and long term. They already have a precedent when a decade ago one bag model, Kaos, represented a 15% of group sales. Tous withdrew it from the market to prevent excessively identification of the brand with this model and when the interest fell, the group’s turnover would fell with him.

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Tous 2016 Spring/Summer Collection. Click to buy

From the strategic point of view, Tous seems to be doing things right, with a healthy growth and without getting too debts. In the long-term, we should not forget that the growth target could be too ambitious at the end. It is not easy to open each year between 10 and 15% of new stores globally, with the obvious increase in logistics and human needs. Anyway, fortunately the company can always rethink this strategy in the coming years if it does not give the expected result

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