FatFace has reported a notable loss following its acquisition by Next, reflecting significant financial changes within the company.
- FatFace reported a pre-tax loss of £3.2 million for 35 weeks, shifting to align with new owner Next’s reporting period.
- The company faced £7.9 million in exceptional costs, largely due to the acquisition by Next.
- Despite a revenue drop from £205.4 million to £191.6 million, trading profit slightly increased to £19.5 million.
- CEO Will Crumbie highlighted a focus on full-price sales improving margins and pre-tax profits.
In a significant development, FatFace reported a pre-tax loss of £3.2 million for the 35 weeks leading up to 27 January, adjusting its financial calendar to match that of its new owner, Next. The acquisition by Next, which involved a 97% stake purchase for £115 million in October 2023, has led to a substantial financial impact on FatFace’s reporting and performance.
The company’s latest financial statement revealed exceptional costs of £7.9 million, mainly associated with the acquisition process. This notable expenditure contributed to the downturn in reported profits for the period. However, trading profit before tax experienced a modest rise to £19.5 million, up from £18.8 million the previous year, indicating some resilience in the company’s core operations amid these financial adjustments.
Revenue showed a decline, falling from £205.4 million to £191.6 million for the period in question. This decrease reflects the challenges faced by the company in maintaining sales levels during a transitional phase. Despite this, FatFace has focused on improving its profit margins, prioritising profitability over sheer sales volume, an approach that has yielded some positive results amidst the overall financial challenges.
Will Crumbie, FatFace’s CEO, expressed confidence in the company’s performance during this challenging period. He noted an improvement in margin and profit before tax as a reflection of FatFace’s strategic emphasis on full-price sales, which continue to appeal to their expanding customer base. Crumbie commented on the importance of both digital presence and physical stores, stating, “Our stores continue to be fantastic places to visit and shop, and our digital presence remains a key part of our offer.”
FatFace’s financial adjustments following its acquisition by Next highlight the company’s strategic focus on profitability amidst a challenging economic landscape.
