End Clothing was forced to write off £12m of stock after an overhaul of its warehouse operations stopped it from shipping orders to customers.
The private equity-backed fashion retailer said a new automated fulfilment system, which was introduced last year, had created logistical problems resulting in “adverse effects on both our operations and customers’ ordering experience”.
This led to additional costs to support order fulfilment and a one-off provision against stock that could not be sold, The Times reported.
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Pre-tax profits for End Clothing plummeted 76% to £9m in the 52 weeks to the end of March, despite sales rising 1.4% to £221m.
The retailer said it was “confident that the inventory management processes and system issues” were “now in good order”.
It added that it was also impacted by the withdrawal of franchises from key brands and was reimbursed for any residual stock.
End Clothing said it was working with key suppliers to “introduce new exciting brands and products during 2023 to make up for any loss”.
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