"Smaller and stronger" Monsoon Accessorize back in profit after rescue
Monsoon Accessorize has been through seismic changes in recent years, but its turnaround appears to be on track with sales of £196 million and EBITDA of £17.4 million in 2021. It also finished the calendar year debt-free, with £15 million of net cash.
Importantly too, the “smaller and stronger but essentially the same” business, said digital sales grew 43% in the final 12 weeks and they now account for around half of all its revenue, as well as for 70% of the Monsoon brand’s sales.
But the stores remain crucial too and it said it “now has strong and profitable UK retail portfolio of 150 stores” and it also has a “profitable” international business.
Its parent company Adena Brands Ltd acquired the business out of administration in 2020 and retained 2,300 jobs in the UK and more than 4,500 jobs globally.
It will soon file its first audited financials since acquiring the firm. This will cover the 17 months to August 31 2021 and will show sales of £200 million, EBITDA of £24.7 million and profit before tax of £19.9 million.
Adena didn’t give comparison figures for the 12-month or 17-month periods, but given the massive change at the company, the store closures and the overall impact of the pandemic, such comparisons may not actually give a clear picture of its health.
However, Adena did say that its latest results “are set against a challenging trading period for retail in the UK and globally, but they reflect the success of the company’s turnaround strategy over the past two years”. That strategy has five main elements (product and brand renewal, digital transformation, retail portfolio restructuring, international restructuring, and central cost reduction) and each “has contributed ahead of expectations”.
CEO Nick Stowe added: “This has been a difficult year for everyone. But we have navigated the challenges in retail successfully and have been able to accelerate and go further with our turnaround than we expected. Our focus initially was just on saving Monsoon and Accessorize. But we have been able to transform how we operate, refreshed our product, become more digital, opened new store formats, and become more agile as a team and business. Now that we have restructured and returned the business to profitability, we’re planning further growth with a solid foundation and renewed confidence.”
And growth over the next year is expected to continue “with a focus on digital, new retail locations and international expansion”.
The two brands’ web presence is growing via their own e-stores and they’re now including “third-party guest brands” for the first time, as well as an expanding their presence on digital marketplaces.
And after 11 new UK store openings in 2021, an additional 20 are planned this year, including its new Accessorize format and new Monsoon boutique concept. They’ll both continue to expand in Europe and the Middle East, including the opening of multiple new stores in travel locations similar to the one recently opened in Zurich Airport.
Founder and chairman Peter Simon underlined the tough times the brands have been through saying that “we took a leap of faith in 2020 to rescue Monsoon and Accessorize at the height of the pandemic”.
But the work to save the business has returned it “to a solid footing” and “secured the long-term future of the brands”.
However, he added that “the impact of the pandemic is by no means over, and we face serious challenges as do all other retailers and brands”.
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