Fatface, a well-known fashion retailer, faces challenges following its acquisition by Next.
- In the 35 weeks ending on 27 January, 2024, Fatface reported a pre-tax loss of £3.2 million.
- This financial period was intentionally shortened to match the reporting schedule of its new parent company, Next.
- Fatface’s exceptional costs, mainly from the acquisition and integration, amounted to £7.9 million.
- Despite setbacks, the company saw revenue of £191.5 million, with a focus on UK sales.
Fatface has recently undergone significant financial pressure as it adjusts to being part of the Next group. In a strategic move, the company aligned its financial reporting period to match that of Next, resulting in a 35-week fiscal term ending 27 January, 2024. During this period, Fatface reported a pre-tax loss of £3.2 million, a stark contrast to its previous performance.
The acquisition by Next, which took place in October 2023 for £115.2 million, heavily impacted Fatface’s financials. While the company managed to generate a pre-tax profit of £4.6 million from regular trading, it faced exceptional costs totalling £7.9 million. These costs were primarily associated with the takeover and subsequent integration into Next’s operational systems.
Despite these financial challenges, Fatface reported revenue of £191.5 million, driven by strong sales in the UK, which accounted for £172.5 million of the total. Digital sales contributed £71 million, highlighting the brand’s continued emphasis on online presence alongside its physical stores.
A year-on-year comparison indicates a decline in total sales and profit for Fatface. Previously, the retailer earned £281.3 million in revenue and £19.5 million in pre-tax profit over a full 12-month cycle. However, CEO Will Crumbie remains optimistic, citing a robust performance under challenging circumstances and the potential for future growth within the Next framework.
Crumbie highlighted the importance of maintaining full-price sales, which have positively influenced profit margins. He emphasised the significance of their customer base and the continued appeal of Fatface products. This, combined with a strategic focus on core operations and platform integration, sets a hopeful tone for Fatface’s future under Next’s ownership.
Fatface navigates fiscal challenges post-acquisition with strategic focus and optimism.
