// Smiggle warns UK market that owner Just Group could end funding
// The stationery retailer said the company relies on the financial support of Just Group
// The ongoing Brexit uncertainty has impacted the entire UK economy & consumer confidence
Smiggle has warned that its Australian parent company Just Group could terminate funding for the UK market if economic conditions continue to decline.
The stationery retailer said the company relies on the financial support of Just Group and warned that the parent company had “reserved the right to review the provision of this financial support”.
Smiggle said the “ongoing Brexit uncertainty has continued to impact the entire UK economy and consumer confidence”.
However, the retailer maintained that Just Group’s intentions were to provide funding “to enable it to meet its liabilities” for at least another year.
Smiggle’s profit growth and store expansion has been affected thanks to the parent company’s initiative to stop funding.
For the year to July 28, Smiggle’s EBIT plunged 35.1 per cent to £7 million, while net profit fell 32.9 per cent to £5.7 million on sales of £69.6 million, which were up 25 per cent.
In regards to store expansion, Smiggle launched 133 standalone stores between February 2014 and July 2018, but has since opened just one new site and three concessions as it shifts its focus to the online market.