Cath Kidston sees sales growth but fails to stem growing losses

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Cath Kidston saw sales edge up over its last financial year, but failed to stem losses in the wake of “increased cost pressures from the weaker sterling”.

In the 52 weeks to March 25, the fashion and lifestyle retailer saw group sales edge up 1.2 per cent to £130.7 million, driven by strong growth in the UK and Japan.

Domestic sales in the UK grew 5.1 per cent to £91.3 million despite major changes to its store estate, having opened seven stores, closed seven stores and relocated a further four.

It said this strategy was aimed at optimising its store portfolio maximising footfall by moving into train stations and airports, aiming the sure up its physical operations against the growing troubles on the high street.

Despite taking measures to offset wider economic factors, the brand made an EBITDA loss of £10.5 million, up from an £8.4 million loss in 2017, attributing the loss to adverse currency movements since the Brexit vote.

Elsewhere, Cath Kidston continued to perform strongly in Asian markets, seeing sales in Japan grow 5.4 per cent, and opening a net four stores over the period taking its estate in the country to 32 stores.

Online growth reportedly helped drive sales in the region, and the brand is planning to continue expansion with another 10 stores over the coming year.

Similarly, in China the retailer secured a new franchise deal which could allow it to open 50 stores in the region over the next five years.

“During the period the group continued to grow top-line sales, despite significant headwinds in some of the markets in which we operate,” new chief executive Melinda Paraie, who joined in June, said.

“The brand clearly continues to resonate with our loyal customer base, particularly in the UK and Asia.

“We are particularly pleased with the significant growth in ecommerce sales in both Japan and the UK, where a strong performance on Black Friday contributed to our best-ever week online.”

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