Ann Summers swings to a loss, blames government for “insurmountable burdens”
UK lingerie brand Ann Summers has been dragged to an annual loss of £3.1m by a mix of negative influences, fragile consumer confidence, weather extremes and the “insurmountable government-led cost burdens,” it has revealed.
The company has swung to a loss after reporting profits of £2.5m a year earlier, with Chief Executive Officer Jacqueline Gold describing the 53 weeks ended 30 June 2018 as a “difficult period”.
This is despite the brand racking up £110m in revenues during the year, up from £109m in 2017.
In documents filed with Companies House it revealed that last year’s collapse of exchange rates and higher trade costs eroded £1.5m of profit on a like-for-like basis.
Employment costs increased by £0.5m due to the new National Minimum Wage and Apprenticeship Levy, while the cost of implementing GDPR requirements and paying growing business rates also took a toll on the business.
The company also reported an operating loss of £3.2m, mainly due to a significant investment in a new IT infrastructure and flagship stores. Two new stores opened during the period, and four further sites were refitted, including flagship stores in London’s Oxford Street, Manchester and Birmingham.
Additionally, the brand is working with marketing company J Walter Thompson on a relaunch that will see it move from a transactional retailer to a purpose-driven business.
The launch of Lipsy Lingerie in AW17 and a new partnership with Nordstrom were some of the retailer’s achievements in 2018.
“Whilst we known we face further challenging times ahead, with our new brand purpose and vision for the future, the re-branding work we are doing is already impacting everything we do as a brand and how we communicate with our customer,” Gold said.
“However, this is just the beginning of our new brand journey, and I remain hugely optimistic for the long-term future success and growth of our business.”
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