Dune London reports a substantial operating loss despite international growth efforts and flat turnover.
- Operating loss of £3.9 million reported, contrasting with last year’s £7.6 million profit.
- Turnover stayed constant at £141.9 million, while gross profit decreased slightly.
- Expansion included e-commerce enhancements and new stores in the Middle East, Australia, and Nigeria.
- CEO Nigel Darwin remains cautiously optimistic about future growth opportunities and profitability.
Dune London, amid its international growth strategy, finds itself grappling with a significant financial downturn. The company reported an operating loss of £3.9 million for the year ending January 2024, marking a stark contrast to the previous year’s operating profit of £7.6 million. Such figures highlight the challenging trading environment that Dune has faced over the last year.
The company’s turnover held steady at £141.9 million, compared to £141.5 million the previous year, indicating no significant growth in revenue. Gross profits also saw a slight decrease, moving from £69 million to £68.2 million. Meanwhile, EBITDA dropped considerably to £4.9 million from £10.9 million, reflecting the financial strain on the business. The impact of rising living costs, unseasonal weather, and geopolitical instability has negatively affected demand for fashion footwear and accessories.
In the face of these challenges, Dune London pursued international expansion by upgrading its e-commerce platform and launching new stores and concessions in strategic markets, including the Middle East, Australia, and Nigeria. The brand expanded its footprint in North America, utilizing concessions and online channels through wholesale and dropshipping models. By the end of the period, Dune operated 150 stores and 162 concessions globally, a slight increase from the previous year.
Despite the difficulties, there are promising signs for Dune. The company is focused on leveraging its brand for further growth through new marketplace and wholesale partnerships. Investing in these areas, combined with strengthening its e-commerce platform and UK store presence, positions Dune to potentially improve profitability. Additionally, early autumn and winter sales showed positive trends, with strong demand for boots and bags offering a glimmer of hope.
CEO Nigel Darwin expressed cautious optimism, acknowledging the inflationary pressures and the soft consumer backdrop impacting retail. He emphasized the company’s dedication to positioning the Dune brand strategically to harness growth opportunities. “We continue to focus with clear intent on positioning the Dune brand to take advantage of the significant growth opportunities ahead – including investing in new markets, infrastructure, and the Dune London brand – while in parallel our teams work hard to drive efficiencies and control costs,” Darwin stated.
Dune London’s strategic efforts in global expansion aim to offset current financial challenges and enhance future profitability.
