Amid challenges, Brand Architekts reports a sales reduction while restructuring its brand strategy.
- Brand Architekts sees a 15% decrease in sales, focusing on fewer but larger brands.
- The beauty firm announced an underlying loss improvement and gross margin increase.
- Successful performance in flagship products, despite discontinued labels, prompts strategic shifts.
- The company anticipates growth through enhanced consumer awareness and product expansions.
Brand Architekts, the company behind well-known British brands like Skinny Tan and Super Facialist, encountered a decline in annual sales by 15%, totalling £17 million for the period ending 30 June. This strategic move towards a concentrated brand portfolio comes amidst a challenging business environment.
The company’s focus on fewer brands has not stemmed a 15% sales decrease from the previous year’s £20.1 million. However, Brand Architekts reported an improved underlying loss of £0.4 million compared to £1.2 million in 2023. Notably, its gross profit margin rose by 1.5% to reach 41.2%.
The reduced sales are largely attributed to the decision to discontinue unprofitable brands, coupled with the persistent impacts of the cost-of-living crisis and an unusually wet spring. Despite these setbacks, flagship products, including The Facialist and The Solution, recorded significant sales increases by 17% and 43% respectively, showcasing the potential within their streamlined focus.
Skinny Tan’s Body Glow product, having launched in popular retailers like Boots and Superdrug, emerged as a fast-growing item within the tanning sector. This success exemplifies the potential of their new strategic direction.
The firm’s net cash position experienced a decline, from £8.2 million to £7 million, partially due to strategic acquisitions like MR Haircare and related costs, including a settlement related to Fish grooming brand for a sum including £225,000 in legal expenses.
CEO Quentin Higham emphasised their progress in streamlining operations while improving margins, projecting further growth through increased consumer awareness and new product developments set for later in the year. He reiterated a commitment to releasing working capital and pursuing international expansion, strengthening the company’s confidence in achieving future profitability.
Brand Architekts remains optimistic about its strategic evolution toward a concentrated brand portfolio, anticipating improved profitability.
