Spanish fashion retailer Tendam to keep free returns, online/in-store sales mix

MADRID (Reuters) - Spanish fashion retailer Tendam, which like others has bounced back from the pandemic in part by boosting its online sales, will stick with free clothing returns, its CEO told Reuters, despite the practice dragging on some digital retail rivals.

The owner of Women´Secret and Cortefiel chains believes the best way for fashion retailers to make profits is to integrate online and physical businesses.

British online fashion retailers ASOS and Boohoo are being hurt by rising product returns as consumers battle inflation and may follow others in introducing a charge for some returns.

Tendam president and CEO Jaume Miquel said charging for returns was wrong. "It looks like we’re trying to make customers feel guilty. Companies need to engage in some self-reflection when they have 40% returns," he said in an interview at the company’s Madrid headquarters.

Miquel said online sales worked better when customers had the option of physical stores to pick and return clothes.

"I would not like Spain's commercial map to be made up of the yellow boxes of Amazon service points (...) shops help to improve people’s quality of life," Miquel added.

Almost 70% of Tendam's online customers return their purchases in-store and the return rate is 21%.

Tendam reported on Thursday that its sales grew 43.3% to 1.1 billion euros from March 2021 to February 2022, in line with pre-pandemic levels. Digital sales were up by 30.4% in the last year versus 2020 and 95.6% higher than 2019.

Tendam's shareholders include the buyout funds PAI and CVC.

Spain’s third-largest clothing group in sales has 1,805 physical stores - 1,200 of which it operates itself - in Europe, Middle East and Latam markets. It plans to open more in Mexico and Iberia, but not in China and the U.S. amid excessive competition. It will also add more than 100 major brands like Levis and UGG onto its digital platform.

Russia's Tendam physical and online sales accounted for 2% of its revenues before the Ukraine invasion. They will remain suspended as the company evaluates whether to reopen or close permanently or operate through local partners as firms like Mango are doing.

"I want to take at least six months to decide," Miquel said.

(Reporting by Corina Pons, editing Aislinn Laing, Elaine Hardcastle)