Abu Dhabi will boost Tendam's young brands and launch new ones as part of its growth plan

Multiply Group, the Abu Dhabi investor that announced on Tuesday the acquisition of the majority stake in Tendam , has drawn up a powerful growth plan for the Spanish textile company, both organically and inorganically, in what is its first investment in the retail sector. An operation that was not closed overnight. The conversations between the parties extended over a period of 18 months, as revealed yesterday by the CEO of Multiply, Samia Bouazza. During this period, Tendam was looking ahead to its IPO, for which it had almost everything ready : financial and legal advisors, placement banks, and even the conditions for the payment of a bonus and being able to pay dividends to its owners, CVC and Pai.

In fact, in its latest accounts it acknowledged that it was immersed in the stock market debut “during the second or third quarter of 2024”, an option that it finally ruled out due to the few guarantees offered by the market to reach the valuation that its owners aspired to, around 2,000 million. Hence, the alternative of a sale to an investment group was opened, reactivating the option of Abu Dhabi due to the growth plans that Multiply has prepared for Tendam. However, the 1,000 million at which the 67.91% transferred is valued implies valuing 100% at around 1,500 million, a figure that is also lower than the valuations that the textile group was looking for in its stock market adventure. Nor is it far from what CVC, Pai and Permira paid in 2005 to the Hinojosa and García-Quirós families.

Once the transaction is completed, which is expected to take place in the next six months when the corresponding authorisations are obtained, Multiply will take a seat on the Tendam board and will implement the plan it has planned for the firm, which will be led by Jaume Miquel, current executive president, together with the current management team. This will follow the roadmap that Multiply applies each time it enters a new sector: it will acquire a reference company in the same sector, which it calls an “anchor” company, which allows it to access a relevant volume of activity, and then take “significant stakes in companies that provide synergistic value to the anchor”, as described in its dossier for investors.

Once the anchor company is taken over, growth is carried out both organically and inorganically. This will also be the case with Tendam. In this case, the CEO of Multiply herself revealed yesterday on her Linkedin profile the three priorities for the Spanish textile company “in the short term”.

The first is to “grow Tendam's results organically through geographic expansion, opening new stores and accelerating retail sales.” In this regard, sources consulted explain, the plan is to promote brands that currently have less weight within Tendam's portfolio, and that the group has acquired or developed internally in the last five years. This includes brands such as Hoss Intropia, a brand that it rescued from liquidation in 2019 ; Slow Love, a firm founded by journalists Sara Carbonero and Isabel Jiménez that it bought in 2021; and others such as Fifty, High Spirits, Dash and Stars, Ooto, or HI&BYE, created internally. These, whose collections are now integrated into Cortefiel, Springfield or Women's Secret points of sale in different markets, will follow the path already started by Hoss Intropia, and will have their own exclusive stores.

In terms of geographic expansion, Mexico and Hong Kong are key areas, where it has distribution centres from which to supply the Latin American and Asian markets, respectively. Although Tendam sells its products in 80 countries, 83% of its turnover is generated between Spain and Portugal. Of the remaining 25%, it obtains Mexico, a country where it had already marked its expansion and where it has more than 120 points of sale, of the 1,800 that the group has. Tendam sees this country as “a focus of strategic growth” as it is just as profitable as Spain and Portugal, due to its size and population volume. In Europe, Hungary, Belgium, Serbia and France are also in the spotlight.

New brands and purchases

The second point of the business plan includes the inorganic part, with the acquisition of “smaller competitors,” investment in “dependent companies” and the development of new brands internally, acknowledges Samia Bouzza. And thirdly, it proposes an acceleration in the use of artificial intelligence and technology to gain efficiencies and improve data analysis.

The new Tendam aims to be a major player on the global textile scene. In this process, it remains to be seen how long CVC and Pai will remain as minority shareholders. The sources consulted speak of an interest in staying in the company in the medium and even long term.

Dividend and bonus

Both funds had already set out the conditions for the distribution of dividends in the event of an IPO, when this was the clearest option for an exit. The latest accounts of Tendam Brands, the company that consolidates the group's results, reflect that, in the event of an IPO, it could distribute up to 7% of its market capitalisation.

Similarly, the board approved in May last year, when the accounts for the 2023-2024 financial year were signed, the approval of an extraordinary bonus, “non-recurring and non-consolidable”, for a maximum of 750,000 euros in cash to “certain members of senior management and other employees”, linked, again, to the IPO. Specifically, as compensation “for their work in preparing the potential public offering for the sale of shares”, always conditional on this being carried out. Something that, in the end, has not happened. Asked whether these conditions have been applied in the sale to Multiply, the company declined to comment.