Whistles struggles in Covid year as markdowns hit profits
Whistles has joined its TFG stablemate Hobbs in filing its results for the year to the end of March and – like its sister brand – said its sales and profits have fallen, although not by quite as much as they did at the larger Hobbs business.
The premium womenswear and menswear retailer said that turnover in the latest year fell sharply to £43.3 million from £70.5 million in the previous 12 months. Adjusted EBITDA was still a profit of £1.7 million, although that was very small compared to the £6.7 million equivalent profit a year ago. And net profit was wiped out as the company made a net loss of £6.2 million after it was profitable to the tune of £2.1 million in the previous year.
The company, which operates its own stores as well as selling in multibrand locations in the UK and abroad, talked of a significant impact on trading due to the pandemic.
Its core categories that include dresses and smart clothing for both work and special events were affected and the company lost 50% of its store trading hours due to lockdown closures. However, it made up for some of the lost trading through e-commerce sales that accounted for 68% of its turnover in the period compared to 36% in the previous year. There was a downside to this online increase however, as distribution and selling costs reached 49.1% as a percentage of sales compared to 43.2% a year earlier. Online has higher fulfilment costs despite its lower overall turnover.
The plunging profit was due both to the lower sales and the dented gross margin rate, which fell to 53.5% from 62.4% as clearance activity saw more discounts than it would have liked.
The company opened two new stores during the year and five new concessions, but also closed eight stores and three concessions, leaving it with 41 standalone stores in the UK and 85 concessions in department stores.
As with Hobbs, the company said that the biggest issue at the moment is uncertainty and the lack of clarity on how shopping behaviour will return to some level of normality.
It continues to have the support of its parent company — The Foschini Group — and of the UK-based company that controls it along with Phase Eight and Hobbs. TFG Brands (London) Limited has been provided with a £15 million funding boost by the parent firm since the year for which these accounts have been filed ended.
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