Pandemic dents Jigsaw sales by £30m+, but progress is being made
It's clear the Covid pandemic has hit it hard. The UK and Irish lockdowns have seen the closure of 77 stores and outlets plus 42 concessions at various points in the past 12 months. And from February last year, it has lost around £31 million worth of sales (excluding VAT).
Around 60% of its sales have happened online in the last year both due to those shut stores and its own digital-first strategy.
During the last year Jigsaw has also implemented deeper sales offers and has "run the business efficiently for cash and to ensure stock is still being cleared affectively and when seasonally appropriate”.
The company really didn’t need a pandemic coming in the middle of a period when it was working its way back to health. But given that it has accessed government Covid support schemes and controlled its own costs very carefully, it has managed to “significantly rationalise its cost base”.
It recognises that the pandemic will make the next year a tough environment for UK retail, even with the rollout of the vaccine programme. But with its restructuring and CVA completed, it said the business is in a strong position "to meet these retail challenges head-on”.
It added in the accounts that its investors strongly believe in the brand “and are determined to see it flourish and maximise its potential by returning to its womenswear heritage with a clear and defined move from physical stores to online platforms whilst also continuing to rationalise the business”.
A Jigsaw spokesperson also told Fashionnetwork.com: “Jigsaw’s board has worked hard over the past few years to rationalise the business, and return to its core heritage offering of providing quality womenswear to the UK market.
“Progress was being made prior to the pandemic to improve the company’s profitability, and Jigsaw remains focused on its strategic agenda during the current challenging conditions. Due to a further restructuring of the business, and a renewed focus on its core product offer, the company is in a better place to capitalise on future success.”
So, looking back at the results it filed, it reported higher sales in its accounts for the period up to February 1 last year. But that period covered 70 weeks rather than the usual 52, so the figures were skewed.
It had changed its reporting period following a change of ownership as new investor Best Dressed Group (BDG) came on board and became its majority shareholder. BDG pumped an extra £5 million into the firm, as did founder John Robinson. The new reporting date puts it in line with BDG’s own financial year.
The company said total group turnover was £128.9 million in the 70 weeks, up from £102 million in 2018. It didn’t give a like-for-like comparison, but dividing the sales figure by 70 and then multiplying that number by 52, it comes out at £95.75 million in 52-week sales. That’s clearly a crude and flawed number that could be bigger or smaller than the real like-for-like figure as it doesn’t take into account that sales patterns would have differed at various points in the year. But it’s the nearest we can get to a straight year-on-year comparison.
The gross profit margin in the extended period fell to 62.5% from 63% a year earlier. However, the group operating loss was £4.9 million, which was better than the £9.5 million it lost in 2018's shorter year. Meanwhile underlying adjusted EBITDA with exceptional costs included meant a profit of £0.5 million, again, better than a loss of £0.4 million in the earlier period. The reported loss narrowed to £9.18 million from £9.88. million.
The company took some key steps during the year, including making itself a digital-first business operating in higher-margin womenswear and concession product categories, primarily in the UK and Irish markets. It continue to expand its omnichannel capability and grew its customer database.
This focus on its core offer also meant that it closed its American business in September 2019 and last January also shut its high-end concept store The Shop at Bluebird, as well as ceasing its junior category.
And since the year-end being reported on here, It shut the Australian business (in July 2020) with nine David Jones concessions exited as part of this. It also axed its menswear category and a number of poorer performing concession partners. And it's still reviewing its cost and supplier base following the successful completion of its CVA.
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