Toy retailer Hornby has seen shares dive nearly 20 per cent this morning following not unexpected reports of major losses.
In the year to March 31, Hornby saw revenues drop nearly 25 per cent to £35.7 million, while losses grew 6.3 per cent to £10.1 million.
This comes just weeks after the iconic British toy brand secured an emergency finance deal worth up to £18 million in an effort to return to profit.
Its strategy includes reducing overheads and product ranges, while cutting back on investment.
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Restructuring costs have already reportedly cost the retailer £3.3 million in the last year, and its not yet clear what effect the emergency funding it is having on its financial wellbeing.
For the 10 weeks to June 8, two days after the emergency funding was secured, Hornby said group sales were lower than anticipated due to “the ongoing impact of insufficient investment in tooling”, but gross margins were up five per cent.
“In the first seven months that I have been at Hornby, we have assessed our position and confronted the reality of the situation in which we find ourselves,” Hornby chief executive Lyndon Davies said.
“Tough decisions have now been taken and we are currently laying down the foundations for our future success.
“There is a new energy in the business and I am excited with our plans as we re-engage across both domestic and international markets with these well-loved brands.”
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