// Aspinal of London expects return to profitability thanks to CVA
// The retailer aims to improve and focus on its online channel
// Its ecommerce channel remained operational and continued to perform strongly amid Covid-19
Aspinal of London has said it expects to return to profit following its CVA and its pivot to being a mainly online operation.
The fashion retailer filed its accounts for the year to the end of March 2020 and found that sales revenue fell almost four per cent in the financial year, dropping to £33.6 million.
Gross margin percentage dropped by 40.5 per cent from 54.1 per cent, while adjusted EBITDA was a loss of £4.1 million.
READ MORE: Aspinal of London’s CVA given approval
The net loss was £12.5 million, from last year’s £5.9 million.
The decline in sales was due to the closure of loss-making stores, but the online business was up year-on-year.
Covid-19 affected sales from February onwards and B2B orders/shipments were largely cancelled or postponed.
However, its ecommerce channel remained operational and continued to perform strongly.
Aspinal of London reviewed its business model amid the pandemic and refocused its UK operation to become a primarily online and ecommerce business.
It said the online channel is a higher-margin one and losing the overheads and complexity of running a nationwide store portfolio will help its bottom line.
It expects 25 per cent of high-level fashion to be sold through ecommerce by 2025.
Aspinal of London launched a CVA last October in an effort to close loss-making stores.
It completed the CVA process last year with all stores and concessions now closed except for London Regent Street, Royal exchange, Harrods and Selfridges. Its flagship and profitable stores are all now based on turnover rents.
Meanwhile the B2B channel now consists of just two franchise partners in China, one in the Middle East and its “very profitable” corporate business. The result of all this is that by this year, more than 81 per cent of its business was online.
Its revenues in November and December 2020 saw a 42 per cent increase year-on-year, despite the Covid crisis.
It now expects £3.5 million in EBITDA in the financial year.
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