Celeb collaborations lift In The Style out of supply chain, returns woes
Supply chain issues and returns rates may have held back In The Style Group’s performance in the half-year to 30 September, but it still did very well.
“It was a period of very strong revenue growth across all channels against an exceptional prior period”, the fast-growing digital womenswear fashion brand said Wednesday.
Despite all the ongoing supply chain issues and the reopening of physical retail this spring, it said its “impressive growth” was a reflection of its differentiated influencer collaboration model (15 and counting) that includes Stacey Solomon, Dani Dyer, Jacqueline Jossa and Billie Faiers with a combined global social media reach of almost 30 million followers. Post-reporting period, new influencer arrivals have included Love Island contestant Liberty Poole and TV presenter Alison Hammond.
And it’s that business model that saw H1 revenues increase an above-expectations 38.8% year-on-year to £29.8 million and by 245.5% on a two-year basis.
Direct-to-consumer revenue also increased 23.4% year-on-year to £23 million and its wholesale revenue jumped 138.7% to £6.9 million on a year ago, boosted by the launch of its partnership with supermarket giant Asda via 100 of its stores.
So where did those supply chain problems kick in? Well, EBITDA did fall to £1.2 million from £2.5 million a year ago (but was still an improvement on the 2020 H1 loss of £0.6 million). Pre-tax profit also halved to £0.9 million on a year ago but was ahead of the H1 2020 loss of £0.9 million.
It blamed the downturn on those industry-wide supply chain disruptions as well as higher return rates versus the prior year, “in part reflecting sales growth of the group's more inclusive size ranges, which is being addressed through increased investment in product and garment technology and fitting”. In fact, it said that since period end, return rates have reduced “in line with expectations”.
From an operational perspective, website visits increased 7.6% and on a two-year basis by 63.3%; conversion rate improved 26bps, or by 9.3% to 3.07%; average order value increased 25.8%; and order frequency increased 23.4%. For good measure, e-commerce Gross Order Value (gross sales pre-returns) increased 48% year-on-year and by 185% on a two-year basis. It also clocked up 243,000 new customers in the period, a growth of 3.8% year-on-year.
Also in the period, the group strengthened its senior management team with the appointments of Sam Perkins as CEO and founder Adam Frisby moving to Chief Brand Officer, “positioning the business to deliver the next stages of its long-term growth ambitions”.
And its current performance and outlook? Since the end of the reported trading period and through the important Black Friday and December trading period so far, the business "has continued to perform well with direct-to-consumer sales continuing their strong growth trajectory.
“Notwithstanding the industry-wide supply chain disruption that is expected to continue into the second half, the board remains very confident in achieving the group's growth plans and the brand's very exciting potential”, it said.
Frisby added: “With this momentum, coupled with recent investment into our scaled-up operational and senior management teams, we look forward to continuing In The Style's exciting growth and achieving our long-term vision for the brand.”
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