Pittards makes loss but is upbeat on footwear, glove and interiors growth
today Mar 27, 2018
UK leather and luxury products maker Pittards saw rising sales and pre-tax profits in 2017, although its underlying loss expanded on the back of a major one-off stock writedown and currency exchange issues.
It sees big opportunities ahead as it makes the most of its strength in gloves and also expands its footwear offer, while interiors should be a future growth area.
The company said that revenue rose 12% to £30.3 million from £27 million in 2017 while its underlying profit before tax rose to £0.4 million from £0.2 million a year ago. But the pre-tax loss hit £4.1 million after an exceptional stock writedown of £4.3 million.
However, it took an optimistic stance as it cut its debt, completed its strategy review and reported a pipeline of new business that “has reached the bulk sampling stage.”
Chairman Srephen Yapp said the listed company made “fundamental changes” in 2017 and has entered 2018 with a new divisional structure in place “and the resources to support our growth ambitions.”
He said the company has identified which markets present “the best opportunities for a balanced, market-led, client and product focused portfolio, that will capitalise upon our production capabilities and expertise, and will drive growth.”
The company has been pushing its bag offer but the foundations of the business remain the footwear and performance glove markets and it said the global glove market, worth around $250 million “is seeing a shift towards casual and active leather gloves which presents us with further opportunities. The strength of our existing customer relationships and expertise give us a competitive advantage.”
It sees footwear as offering the biggest growth opportunity with lifestyle trends driving the growth of the Athleisure and Outdoor shoe categories in a combined market segment worth around $60 billion at wholesale.
Yapp said the firm’s established UK footwear leather manufacturing capability and expertise “is well placed to meet the needs of leading brands in this sector who are prioritising differentiation and innovation. In addition, global companies are increasingly looking to Ethiopia as a manufacturing location creating a further opportunity for Pittards Ethiopia.”
In order to build a balanced portfolio it’s also working to develop new customers in new markets. The interiors sector, which has a global market value of around $39 billion is a target market for Pittards. It said interiors as a category increased its share of total global leather usage from 7% in 1990 to 27% in 2015 and this is understandably seen as a future growth channel for the firm.
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