Boux Avenue losses widen on lower sales, discounting and supply chain issues

By

Barbara Santamaria

Published
Jan 10, 2019

Theo Paphitis’ lingerie chain Boux Avenue blamed the ‘challenging’ retail environment, widespread discounting and a critical shortage of stock for a dramatic increase in annual losses.

For the first time since launching the brand in 2011, Boux Avenue reported a 3% decline in comparable sales for the year ended 31 March, as the widely reported decline in store footfall extended to the online market.

Revenue for the year fell by £2m to £47.4m, hurt by the increased discounting and currency pressures. Additionally, the lingerie brand was hit by supply chain issues, which resulted in the business not having the full range of stock planned, particularly at key trading times.

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EBITDA loss for the year jumped by over £4m to £8.4m, and the company’s total comprehensive loss widened  to £10.7m from $4.6m a year earlier.

IMPROVEMENTS

Chairman Theo Paphitis tried to remain upbeat as he described the company’s 2018 woes in documents filed with Companies House on Tuesday. He highlighted a 19% increase in e-commerce sales, and focused on the measures the company has taken since year end.

The intimates the retailer has recruited M&S veteran Michael Kerr as its first ever CEO and Zoe Price Smith will join the brand as new design and product director from rival Hunkemoller.

A new £3m warehouse and distribution centre has opened in Crewe, more the doubling the business’ capacity and providing more fulfillment capabilities to drive significant growth from the online channel. Paphitis said the capabilities was demonstrated during last year’s Black Friday, when orders processed were several times the brand’s normal run rate.

Boux Avenue has also opened a new stores at Victoria Centre in Nottingham, and is currently considering further openings. It currently operates 30 stores across the UK.

“The group and I remain fully supportive and committed to the Boux Avenue brand. The current financial year and trading has seen improvements. We remain cautious given the current environment and political uncertainty but are now well placed to seeing this exciting brand develop further,” the chairman said.