Tom Tailor sells troubled Bonita brand

Embattled Hamburg-based fashion chain Tom Tailor has sold its struggling Bonita brand.

The company signed a sale agreement with Dutch firm Victory & Dreams International Holding, it announced on Wednesday. Further details about the transaction were not provided. About 300 people are employed at Bonita’s headquarters in Hamminkeln, Germany, a spokeswoman said. In total, the brand has about 3,000 employees, making up half of Tom Tailor’s workforce.

The sale came as no surprise. Earlier this year, the group’s management had announced a review of its options regarding the Bonita brand. Tom Tailor acquired Bonita in 2012. The company, which specialises in fashion for women aged 50 and over, had recently see its revenue decline.

Tom Tailor shares rose just over 4% in after hours trading following the company’s announcement. Tom Tailor CEO Heiko Schäfer said the transaction was an “important step” for the group. “We are creating a clear situation, freeing up capacities and can in future focus fully on continuing to implement the successful strategy for our core Tom Tailor brand.”

Recently, the group’s largest shareholder China’s Fosun made a takeover bid for the company in a deal valuing the business at €96 million ($109m). The Chinese conglomerate has been involved with Tom Tailor since 2014. Fosu is a privately held industrial and commercial conglomerate with headquarters in Hong Kong. It has invested several times in European fashion firms in recent years, and acquired a majority stake in Austrian hosiery manufacturer Wolford last year.