Radley sales jump as e-tail, UK and US stores business bounce back
Radley & Co’s Full year results for the period to late April 2022, showed turnover rising to £47.5 million from £38.6 million in the previous 12 months and sales jumping to £75.7 million from £48.7 million.
But it made pre-tax loss of £2.8 million compared to a smaller loss of £1.1 million in the previous year and the net loss for the period was £2.5 million compared to £1.1 million a year ago.
However, the company is investing heavily in growth and it said its accounts demonstrated its “robust emergence and recovery from the pandemic”, adding that underlying EBITDA rose to £5.3 million from £2.8 million the year before.
Since the reopening of UK retail from April 2021, the brand has been able to “leverage a more profitable UK store portfolio, reshaped during the pandemic”, and an enhanced digital offering both direct to the consumer and through retail partners. And its rapidly expanding US business “forged ahead” with region sales up 54% due to new drop ship channels, its first stores and improved e-sales on its own webstore.
The company has a number of wholly-owned operating units with Radley & Co Ltd managing its UK, European and Asian wholesale distribution with partners. That unit also runs the global e-commerce platform operating in 39 countries. Its sales were 19% higher year-on-year and provided 41% of all external group sales, compared to 54% in the previous period (the drop was due to unusual earlier e-commerce strength during lockdowns).
Meanwhile, Radley Retail Ltd operates its UK physical stores distribution and saw sales soaring 135% with strong recovery from the pandemic and the unit also contributing 41% of all external group sales, compared to 27% a year earlier.
Another unit, Radley USA, provided 17% of all external group sales compared to 16% in the previous year and saw an annual sales improvement of 58%. The best news was that this improvement was because of “growth in market penetration through digital and other direct channels” rather than it simply recovering as pandemic restrictions were loosened. The US remains its “key strategic growth market”.
The company’s multi-channel, multi-country strategy is clearly reaping rewards.
CEO Justin Stead hailed the overall higher sales that were “delivered by a strong return to trading across all channels in the UK, especially in our direct channels, and in the USA by increased market penetration from our developing direct to consumer footprint”.
He said that in the UK, the sharp focus on digital channels saw it quadrupling its Amazon business. And while its own website was down against the previous year, because of the return to physical stores, it was still 14% ahead of FY19. Its web concession, partnership with John Lewis was well ahead of both FY21 (+16%) and FY19 (+42%).
Its UK stores rebounded strongly, up 183% on FY21, as did off-price concessions (+145%). Its UK wholesale partner business recovered well and was 65% ahead on the year. Importantly, as well, travel retail started to climb back during the year and it started shipping to its key partners again in the period.
Radley said its global DTC strategy that’s a key part of its growth. plan is progressing well and now accounts for 69% of its global sales from 65% in FY21 and 59% in FY19. Key to this is the digitally-focused drop ship strategy. New partner arrangements allow it to both extend its offer within existing categories and to add new categories on its partners’ platforms and to fulfil orders directly from stock in its distribution centres. This is delivering incremental sales and attracting new customers.
As for the US, its growing team in Dallas manages a full suite of direct channels that are expanding fast and “engaging the consumer with widely on our terms”. Total American sales at £18.8 million rose 59% in local currencies, and 39% were DTC, up from 24% a year earlier.
The company had opened its first two stores in the US during the year with debuts in Las Vegas and Palm Springs, adding a further six since then across “some of the best best premium outlet malls in the USA”.
Internationally, it's store in Batavia Stad mall outside Amsterdam opened in FY21 during lockdown and “has yet to demonstrate its full potential”, but the company is optimistic about the market. It also said its partnership with Myer Australia is performing very well and its shipments to that retailer rose 67%. It expects the Australian market to become a much more significant contributor to its business over time.
It also expects its lifestyle extensions to grow. Footwear has been a particular success story and from a standing start three years ago, it represents 3% of sales in full-price channels. Its overall footwear business was 150% ahead on the year.
The luggage business is also recovering extremely well and rose sales by 125%, while sales of watches in its retail channels were up 68%.
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