Aspinal of London sales rise but costs mean loss widens
Aspinal of London may have hailed higher sales in its latest trading year, but those sales didn't bring any benefits to its bottom line and the company made a wider loss in the 12 months to March 2019.
The company, which is seeking extra funding to finance faster international growth, said its sales rose 11% to reach £34.9 million, after a 7% increase in the previous year. This was helped by a larger number of international customers buying into the brand.
But its losses also accelerated. The operating loss widened to £4.68 million from £2.38 million. Adjusted EBITDA was a loss of £1.4 million, much worse than the £0.2 million made a year earlier. And the net loss was £5.94 million, compared to £3.24 million in the prior year. That came as the gross margin fell to 54.1% from 57.2%.
But the company had explanations for this. It said that the conclusion of its ERP system implementation affected the figures and will have no further impact in future periods. It also had to write off stock in 2019, which contributed (to the tune of 3.2%) to that fall in the margin. However again, this will be a one-off impact.
And as the higher sales figure shows, there was some reason to be cheerful. The company said that during the year it delivered growth in key areas including retail, e-commerce, wholesale and franchise. It opened new stores in the Dubai Mall in the Middle East and the Icon Outlet at the O2 in London, plus “successful” pop-ups at London's Heathrow Terminal 5 and Galeries Lafayette in Paris.
It also said that sales growth has continued since the year-end with like-for-like sales rising 9% as of October 31 2019. E-commerce has been particularly important to this and the company said that online sales now account for 40% of the total turnover of the business.
As its store opening process shows, physical shops remain very important to the luxury brand. It said the first full year of trading in its Regent Street flagship, plus the O2 and Heathrow stores more than offset reduced sales due to the closure of some non-performing House of Fraser concessions. And as mentioned, wholesale and franchise channels are growing, particularly boosting the firm’s international operations, as well as its business in its home market. Wholesale and franchise saw an increase in revenue of 51% in the year.
The company has five stores internationally, in addition to its 20 UK outlets, and will open a Harrods concession this spring, which will help it target both domestic and international customers.
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