TNT Explores Sale of Continental European Fashion AssetsAaron Kirchfeld, Celeste Perri and Maud van Gaal
TNT Express NV, the Dutch package-delivery company, said it’s exploring a sale of its fashion-logistics business in continental Europe as it reviews its assets after a failed takeover bid by United Parcel Service Inc.
The business provides transportation and warehousing for clothing retailers and employs about 660 people, TNT said in a statement today after Bloomberg News first reported the planned disposal yesterday. The asset is likely to attract interest from companies and buyout firms, said people familiar with the plan, who asked not to be identified because talks are private.
“The possible sale of the Dutch operations of TNT Fashion will be designed to ensure service continuity,” TNT said. “The sale process will not affect the terms and conditions of existing agreements with customers and suppliers.”
The Hoofddorp, Netherlands-based company is revamping after UPS, the biggest package-delivery company, terminated a 5.16 billion-euro ($6.9 billion) bid in January amid opposition from European Union regulators. The overhaul includes the disposal of a unit in Brazil and the company’s domestic road business in China.
TNT declined as much as 8 cents, or 1.2 percent, to 6.65 euros in Amsterdam, and traded at 6.67 euros as of 9:19 a.m. The stock, which lost about half its value on the day UPS pulled its offer, has declined about 20 percent this year, the third-worst performer on the 25-member AEX benchmark index.
The fashion business has about 1,000 employees in total, of which 330 work in the U.K. TNT is only considering a sale of the Dutch unit and not the U.K. fashion asset, which is being integrated into the regional U.K. express operations, it said. First-round bids are due this month, two of the people said.
TNT said in its July 29 earnings statement that TNT Fashion outside of the U.K. would be reported as an “unallocated” business. The company reported a second-quarter loss, hurt by an impairment charge partially stemming from the loss of a “significant fashion contract” it didn’t identify.
TNT Express plans to improve earnings by 220 million euros by 2015 to help lift the operating margin to about 8 percent in its main European markets. The efforts coincide with trading conditions this year that Chief Executive Officer Tex Gunning, who took over on June 1, has called “challenging.”