Seasalt sales and margins surge as unique offer means shoppers pay full price
Seasalt Cornwall, the fashion brand that trades on a wholesome Cornish lifestyle, is one of the brands defying the downturn on UK high streets and has just filed an impressive set of results for its latest fiscal year.
In the 12 months to January 27, its sales surged by 23% to £51 million for a ninth year in succession of 20%+ sales growth. And it doesn’t look like it’s set to slow down any time soon. The company also said that sales growth has continued since the fiscal year-end and like-for-like turnover is still rising.
That’s particularly encouraging as the company is rolling out new stores relatively quickly, so there’s always a risk that its growth could be mainly a result of it adding more space.
As well as stores, the firm is also focusing on its online operations and said that its e-sales rose an even better 33% to make up 40% of its total turnover as of earlier this year.
Underlying operating profit looked even more spectacular, and while that’s not a word we use often, a 66% increase in profits on an Ebitda basis justifies the superlatives. Profit as a percentage of sales rose to 8.7% from 7% so it’s clear from this margin rise that the company isn’t sacrificing earnings as it pushes ahead with its expansion plans.
That said, the company didn’t give specific figures for operating profit and not every figure it did give was record-breaking. Accounting rules, for instance, impacted its pre-tax profit number, so the firm made only £367,884 before tax.
The company said it saw strong customer demand during the year and (as that 8.7% figure showed) was able to sell more goods at full price.
While many retailers are battling an environment in which consumers are prepared to sit it out and wait for price drops, this approach doesn’t seem to be the case for those shopping at Seasalt. “The customer has realised that we price our product affordably, and we’ve concentrated on providing great quality,” chief executive Paul Hayes said.
He also said that the company’s regular drops are offering enough newness to keep customers coming back. “We’ve got 12 launches a year now coming through on a regular basis and we’re seeing the customer engage with that.”
It’s clear that, like retail peers such as Ted Baker and Joules, Seasalt is benefiting from a strong proposition that isn’t being widely replicated and finds that consumers are prepared to pay full price as a result, as well as coming back for more again and again.
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