'Digital-first' transformation drives Seasalt sales towards £100m
Seasalt continues to prosper, with the Cornish fashion brand saying on Monday that trading has been very good since stores reopened in the spring.
As an add-on to its annual results for the year to last January, the retailer said that for the current financial year, online sales are growing “significantly above expectations” and now make up 56% of the firm’s total revenues. That’s particularly good news given that e-sales growth for many retailers has fallen back now that their customers can shop in their stores again.
Seasalt has added to its online strength by expanding its links with strategic partners including Next, Zalando and Amazon US. The brand also launched online with M&S in April.
And that online performance doesn’t mean that its physical sales have been weaker. It has focused heavily on stores and not just its own locations. It launched in M&S stores in June, for instance. And it said that its own stores “rebounded strongly after reopening”.
It has also seen improvements in the EBITDA margin through cost control and its commitment to full-price trading and the 12 months to 29 January 2022 should see total sales of almost £100 million.
Looking back at the year to 30 January 2021, whose results have just been filed, the company said online sales rose 72%, “reflecting the strength of Seasalt’s digital transformation programme and its innovative marketing strategy”. Sales through digital channels accounted for 67% of its total revenue over the period and “continue to represent the majority of revenue.”
Clearly, physical stores were in a less happy place and it added that temporary shop closures enforced by Covid-19 throughout 2020 and in early 2021 caused its store sales to decline by 57%. After reopening, “the stores recovered more quickly than expected and continue to trade ahead of expectations. The stores remain core to Seasalt’s customer experience proposition and are proven to drive sales across all channels”.
Total sales in the 12 months fell 7% year-on-year to £69.9 million, due to those store closures and general changes in consumer behaviour. But in the circumstances, a 7% drop seems like quite a good result. Many of the company's rivals saw much worse sales falls during the period given how radically consumer lifestyles were affected by Covid restrictions.
Even though sales fell, EBITDA in the same period was £6.6m, an increase of 50% year-on-year “as the business focused on profit improvement and a full-price trading strategy”.
The company has been investing heavily in various ways to boost its performance, including more than £2.5 million in new technology in the past 18 months. This has resulted in new UK and international websites and “industry-leading software that allows online orders to be fulfilled in stores”.
And it said its investment in technology, “along with innovative marketing and Seasalt’s longstanding commitment to sustainability” have all contributed to “record levels of customer acquisition in the current financial year”.
CEO Paul hayes said: “We have seen the benefits of our digital transformation and can now genuinely call ourselves a digital-first brand. The excellent performance of our stores since they reopened and growth with our strategic partners point to a bright future and demonstrate the resilience of the business.”
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