Takko - Thoughts on new management
All,
Please refer to our unchanged analysis here.
Takko’s new leadership team consisting of new CEO Karl-Heinz Holland and new interims CFO Ernst de Kuiper strongly suggests that despite continuing lock-downs the risk of insolvency remains remote. As chairman of the board Mr Holland has a reputation to defend, but as solid operating and turnaround manager, not as someone overseeing an insolvent restructuring. Ernst de Kuiper is a Dutch professional interims CFO coming to Leenbakker and Kwantum. He too is a turnaround manager, but not a someone with insolvency background.
Further, Mr Holland has been a member of the Takko advisory board for some time and has previously held the CEO spot for a period. If his intention were to take Takko through German insolvency, he would’ve been far safer off kicking the process off from a supervisory board position instead.
Takko vs. Matalan:
Common features: Both companies are benefitting from their retail park situations and from their relative value protection from online competition in the “boring” segment at the bottom of the price gamut.
Differences:
- Rent: Matalan have gone through a CVA, which has established communication lines with landlords as well as precedent and procedures for further lock-downs. Takko is based in a jurisdiction where such renegotiations have hitherto been impossible and are yet to be tested under Germany’s new regime. Its far smaller store footprint also means it has 10x the number of stores to deal with.
- Government support: As a PE-owned company, Takko has no access to various government programs. By contrast, Matalan have received £25m CLBILS support via its banks.
- LC Facilities: Takko is not dependent on third-party trade insurance, but can deal directly with deal with its LC providers.
We continue to hold a position in Matalan on which we are publishing a new model today, but not in Takko.
Wolfgang
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E: wfelix@sarria.co.uk
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