Fashion retail group Monsoon Accessorize has announced a 12 per cent decline in group sales to £529 million over its full financial year, a period it said was “the most difficult” in its 40-year history.
For the 52 weeks ended August 25th 2012, EBITDA fell 59 per cent to £46.9 million as tough trading conditions depressed sales and margin, while UK & Republic of Ireland sales dropped 10 per cent.
International sales, excluding Russia, dropped to £16.8 million, down 21 per cent on a year earlier as the group reported an operating loss of £4 million compared with an operating profit of £60.1 million the previous year.
Noting the deteriorating economic environment in the UK and abroad, Monsoon Accessorize Founder Peter Simon conceded: “This was a challenging year and trading was the most difficult Monsoon Accessorize has experienced in our 40-year history.
“In response we took far-reaching actions to strengthen the business and improve our ranges.
“We implemented a full reorganisation of our senior management, leading to the appointment of John Browett as CEO a few weeks ago.
“We have continued our global expansion because we see a significant demand for our products in a growing number of overseas markets.
“Through improving our product we have also strengthened our resolve against the discounting experienced during this last year.”
Since the start of the new financial year, unaudited management Group EBITDA for the first half of the 2012/13 financial year is around 20 per cent higher than a year previously and the retailer said it had seen a “solid Christmas trading period”.
Monsoon Accessorize generated strong cash flow of £45.2 million last year with no external borrowings and has made “fundamental changes” to its operations.
Cost control has been a vital part of improving the business while the new leadership structure and ongoing expansion have also been implemented to strengthen the business.
Over the year, the retailer opened 116 net new stores, opening five and closing 13 in the UK & Ireland while internationally, 207 stores were opened and 83 ceased operating.
While Simon acknowledged the hardships faced by the company last year, there are reasons to remain positive about trading in the year ahead.
He commented: “Throughout its history, the Group has always maintained strong finances.
“The early repayment in 2011 of around £200 million of borrowings from our buy-out demonstrated the Company’s commitment to trade debt free and manage cash prudently.
“Now we have returned to our customary net cash position we have the financial resources to invest in the future and weather the current retail downturn.”