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Paul Smith turnover tumbles as wholesale declines

Paul Smith Sales Decline Wholesale - Retail in Asia

Fashion group Paul Smith on Thursday reported tumbling full-year turnover as its largest channel, wholesale, saw sales falling by 13% due to weak demand in core markets. And while overall profits rose, operating profits fell.
The high-end men’s, women’s and childrenswear firm said turnover for the year to 30 June 2016 was £157.5 million, down 8% on the previous year.

A 27% rise in e-commerce sales and 2.1% increase in retail sales could not offset the 13% decline in wholesale revenues as demand weakened in the UK, France, Russia and parts of Asia. On a like-for-like basis, retail sales increased by 3.9%, reflecting a mixed performance across core markets.

And what exactly was the problem? The brand blamed different geographical challenges for its weaker full-year results. It said its wholesale customer base in Europe continued to shrink, while the ready-to-wear market in Asia slowed down. In the Middle East, Paul Smith partners reported lower consumer confidence brought about by the unsettled political situation.

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But management described the performance as “satisfactory given the period of challenge and transition and the significant impact of foreign exchange movements”.

Profit for the year was £4.838 million after a small loss the previous year, but operating profit before exceptional items fell 62% to £4.556 million.

In the 12 months, Paul Smith focused on refreshing its product and branding and streamlining is ready-to-wear, accessories and shoe collections into two distinct lines: Paul Smith and PS by Paul Smith. It said its current AW16 collection has been generally well received.

(Source: Fashion Network)

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