Down but not out, Temperley confident in new strategy after weak 2019
Temperley has been through some tough times in recent years and experienced a "significant downturn" in trading due to the impact of Covid-19 this year. So it's no surprise that its 2019 accounts filed this week also came with a warning about its ability to continue as a going concern from its auditor.
But that’s based purely on the figures and the company itself seems confident as it heads towards its 20th year with a new direction and new CEO. It said that it “now has the right operational structure and strategic plans to leverage the brand popularity in the luxury retail market”.
So what were the figures that worried the auditors? The company made a pre- and post-tax loss for the year of £3.74 million in 2019, following a loss in the previous year of £3.34 million. And it had net liabilities at the end of last year of £20.38 million, which was wider than the £16.63 million of a year earlier.
The business saw it's turnover falling 13% to £8.46 million last year from £9.69 million in 2018. It said that revenues were challenged due to “historical issues with both range and quality” but “these issues have been addressed for future seasons as part of the new business strategy”.
And while its sales were lower, an improvement in its gross margin and strong cost controls resulted in an EBITDA loss that was narrower at £2.9 million compared to £3 million a year earlier. However, this excluded the impact of a 2019 £635,000 bad debt provision.
The womenswear business, which was founded in 2002 by Alice Temperley, is currently distributed in more than 30 countries via around 60 wholesale accounts and 58% of its sales come from overseas with its main non-UK markets being the US and Canada, Europe, the United Arab Emirates, China and Hong Kong.
During last year it was heavily focused on its turnaround programme, having appointed its new CEO, Luca Donnini, in March 2019, and working to evolve its positioning from being simply a British fashion brand into “an international iconic luxury lifestyle brand with British heritage”.
This involved it in broadening its product offering to daywear, which it sees as a “key area of opportunity”, while continuing to maximise its existing evening and bridal collections.
It has also been investing in retail with the opening of a new franchise store in Dubai last December and ongoing investment in its website, including a new e-commerce platform.
Given how difficult times have been, it's been fortunate in having shareholder support and last year it completed a new equity raise of almost £1.9 million via the issue of shares to both existing and new shareholders, as well as taking other actions to shore up its finances.
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