Inspecs upbeat despite dipping orders in Europe, big management changes ahead
Unfavourable foreign exchange movements saw Inspecs Group suffer a reported dip in revenues for the nine months to 30 September and there was news Thursday of a new CEO and finance chief at the global eyewear designer/manufacturer with its chairman also set to retire.
Further negative news was a 13% dip in orders and that means expansion at its Vietnamese factory and investment in a new factory in Portugal will now be on hold until at least Q3 2023.
But the picture wasn’t all negative for the UK-based group, which makes eyewear under its own labels, as well as for brands including Superdry, O’Neill, Radley, Farah, Ted Baker, Lulu Guinness, Talbot Runhof and Marc O’Polo.
Sales grew on a constant currency basis across Europe, UK and the US, as well as in the group's manufacturing businesses in Vietnam and China.
Currency movements in the reported period, particularly with the euro weakening against the US dollar, meant revenues slipped 3% to $179.4 million. But acquisitions in December added $10.8 million to the sales numbers, pushing totals into the positive (+2.8%).
On a constant revenue basis, sales rose 3.7% to $191.8 million and by 9.8% including those acquisitions.
In Europe, in particular Germany, Inspecs said both the macro-economic climate and consumer confidence have deteriorated sharply since September, noting German consumer confidence is now at a 25-year low “and this is reflected in the order intake that is significantly down on the previous year”. The group's expectation is that the German and French markets will remain weak into the first half of 2023.
In the US, the order book remains at a similar level to the prior year while in the UK, the group's frame business has shown growth on the previous year.
So what does that mean for the outlook? “It is clear that Inspecs is not immune to the macro environment or the downturn in consumer confidence, particularly in Europe, and this is expected to impact the remainder of this year and into the first half of 2023”, it said.
But on a positive noted, Inspecs also said it continues to increase its market share and the group “is well placed to return to growth as and when its core markets return”.
As mentioned, there are also big changes at the top. With Lord MacLaurin set to retire as chairman on 1 December, founder and CEO Robin Totterman will then move to an executive chairman role. Simultaneously, Richard Peck, current non-executive director and previously MD of Luxottica Retail northern Europe and MD of David Clulow, will become the group's new chief executive.
Also, Matthew Loran is set to join the group in November as its new finance manager. He previously worked for Capita Group and Imperial Brands, working with the divisional finance teams around the globe.
The board also said it is currently in “advanced stages” to appoint two new additional non-executive directors to the board.
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