Bags, sneakers, celebs and premium prices drive Kurt Geiger higher in UK, US
Upscale footwear and accessories retailer Kurt Geiger is continuing to strengthen with a sales and profits increase in its latest year, accounts filed at Companies House showed this week.
In the year to the end of January, it left much of the rest of the footwear market behind and managed to increase its sales by 3.1% to £334.7 million. And importantly, the 56-year-old company, which has more than 70 stores globally, also saw its profits rising. Pre-tax profits increased to £30.4 million from £26.2 million and it generated an operating margin of 8.4% versus 7.6% in the prior year. The profits would have been even higher had the company not taken a hit of more than £4 million from the collapse of House of Fraser last year.
The retailer was helped by its diversification into selling more handbags, as well as by an increasing focus on selling online. And its expanding American wholesale business also gave it a boost. It saw international wholesale doubling on that US move.
Owned by private equity firm Cinven, it’s one of the success stories in UK fashion retail at present and is being helped by its premium positioning, differentiated product offer and strong marketing that relies heavily on aspirational celebrities.
But analysts said it needs to be careful. Kate Ormrod at GlobalData pointed out how it “has adeptly exploited the trainer trend, though with 361 women’s styles currently available online, it is in danger of product overlap. [It] should rein in its more overtly trend-led embellished styles in its private label offer as such over-designed seasonal styles hold little longevity for shoppers, making it harder to justify premium price points”.
She also thinks it has “struggled to build sufficient traction among males… despite the inclusion of male celebrities such as Nick Grimshaw and Johnny Borrell in its marketing campaigns. According to [GlobalData’s] How Britain Shops 2019 survey, males account for just over one fifth of the retailer’s shoppers – with a need to drive further unisex appeal if it is to make the brand a go-to destination among males”.
But regardless of this, she added that “with consumer desire for quality, durability and enhanced design, we expect Kurt Geiger to continue to thrive, with potential to make further waves in the children’s footwear segment”.
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