Theo Paphitis Retail Group; Christmas & Financial Year End 2016 Trading Statement
Highlights Christmas 2016
Positive like for like sales and gross profits delivered by the Theo Paphitis Retail Group for Christmas 2016 trading period, being 6 weeks to 24 December.
“Firstly, I am delighted that each of our individual brands and the group as a whole were able to deliver growth in like for like sales at this crucial time for retail. Once again, we observed the further shift of our customers to purchasing online with growth in this channel across the group being over 50% ahead of last year. Like last year, we saw multiple peaks, with Black Friday being a key event in the UK retail calendar. Retail is facing many challenges, particularly with a decline in footfall on many high streets, but at the same time we see opportunities that come with the continued development of technology that makes shopping as convenient for customers as it has ever been. We will continue to invest in this area to ensure that our much loved brands interact with customers in ways that suits them best.
I have never known a more dynamic time for retail. Working with heritage brands, Ryman and Robert Dyas that have both been around for over a century, the pace of change is more challenging and opportunistic than ever. Having started the Boux Avenue business only 5 years ago, even in this relatively short space of retail history, we have seen our business plan adjusted to take into account the momentous changes in shoppers’ habits.
Retail, especially within bricks and mortar in the UK, is facing the perfect storm. As mentioned above, changes in consumer habits, the impact of the weaker pound against the dollar and euro, coupled with increasing labour costs, the apprenticeship levy and the sucker punch in the lack of an honest and equitable reform of what is an archaic system of business rates.
With regard to the so-called recent business rates reform, retail has changed dramatically over the years but is faced with a tax that was introduced in a different world. The facts are that footfall and activity on our high streets and town centres are in decline but businesses like ours are about to see an overall increase instead of a decrease in their rates bill in the next 12 months.
We have invested significantly in the last 2 years building and modernising our infrastructure, in particular commissioning a new warehouse and distribution facility in Hemel Hempstead and new websites for Ryman and Robert Dyas to meet the changing needs of today’s consumer. Boux Avenue will be moving to a new e-commerce platform this quarter”
Like for like sales level. EBITDA £9.6m from £10.1m in 2015.
Turnover decreased 2.5%, due to store closures at lease expiry, to £127.7m from £131.0m.
Growth recorded in ecommerce, in store services like DHL, printing and most recently a trial with Western Union and launch of B2B business.
Ryman has a nationwide network of 216 stores with over 120 years of retailing on the UK High Street.
Boux Avenue's 5th full year of trading in the UK, growing to a total of 28 stores in the UK. The brand also has 14 franchise stores overseas.
Total UK sales increased by 21.5% from £36.5m to £44.4m, assisted by strong like for like sales of 13.4%; this building further on total growth of 35.5% and like for like growth of 18.9% in 2015. Gross profit margins also increased by 2.1% in the year and gross profit increased by £5.1m.
EBITDA loss reduced to £1.7m from £2.9m in 2015, in line with business plan.
The new financial year has seen further avenues for growth through the sale of Boux Avenue product on Asos.com, Very.co.uk, Littlewoods.co.uk and Lipsy.co.uk.
Focus has also been increased on developing international sales through our website bouxavenue.com, which will be assisted by new technology being introduced through our new platform, as well as continuing to develop our franchise business.
Turnover decreased 4.4% from £125.5m in 2015 to £120.0m, with like for like sales reducing by 4.7%.
Underlying EBITDA reduced from £7.0m in 2015 to £1.5m.
A challenging year with a change of management team, together with continuing investment in commissioning a new warehouse and logistics centre in Hemel Hempstead. Technology introduced simultaneously to enable future growth in e-commerce as well as stores. This unfortunately resulted in disruption to our supply chain and business in general, impacting our financial performance in the short term. The warehouse is now fully settled and costs running to expectations, helping drive strong growth in particularly e-commerce as seen over the Christmas trading period.