Takko - comment

The German apparel discounter released its capital markets presentation and announced the Tjeerd Jegen - previously CEO of Hema - as new CEO. To deleverage Hema, Tjeerd drove a strategy of capital-light expansion - decoupling the brand from its stores and establishing it on its own via JVs and in-store agreements abroad. We are not sure this strategy would work in the same way for Takko as it made sense for Hema as Takko does not have the same design focus as Hema has. That Hema ultimately had to restructure unfavourably to the bonds may have had more to do with Hema’s unique problems than his management or strategy, but it does weigh a little on our thoughts.

To be sure though, Takko is - all things considered - in rude health, even if the soon-to-be-reported EBITDA figure benefitted from some one-off tailwinds. The company needs to refinance its debt structure shortly and a new CEO is probably required for that, as might be Tjeerd’s specific experience in communicating with creditors.