White Stuff profits dented by growth-focused investment
Lifestyle retailer White Stuff’s results on Friday showed that the company has returned to sales growth for the 2018/19 financial year after a tough time in 2017/18. But its investments to drive that growth dented its profits with a sharp decline.
The company has invested in customer-facing initiatives and boosting its digital operations and this caused its profit on an EBITDA basis to plunge by a massive £1.9 million in the 12 months to April, dropping to £4.1 million.
Sales rose 2.6% having fallen more than 6% in the previous year and international was particularly strong with a surge of more than 28%. Yet its digital sales rose only 8% in the 2018/19 period, although they now make up 32% of the firm’s total.
The firm launched a new web platform in the prior year and has spent even more time and money on greater personalisation and other user-friendly features (as well as marketing) in the latest year.
Peter Stephens, an analyst at GlobalData said the company needs to continue its digital focus and improve its delivery options to drive the channel’s sales higher at a faster rate.
He added: “With its rival Joules reporting impressive growth last week aided by its distinctive design handwriting, and White Stuff reporting higher than planned levels of promotional activity, it indicates that the lifestyle retailer needs to further evolve its product ranges to drive appeal.”
But he believes that having extended its lifestyle credentials through the development of its menswear, childrenswear and accessories offer, its expansion via Next’s website will help boost visibility of these categories.
He also thinks the firm’s plan to focus on communicating product quality “is apt, with White Stuff needing to justify its mid-market price points and showcase value for money to encourage spending and drive customer acquisition.”
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