The West Retail Group, the parent of Wren Kitchens, has reported a significant decline in profits and major turnover reductions, alongside substantial job cuts.
- Wren Kitchens’ profits fell to £35.1 million in 2023, marking the lowest levels since 2017, primarily driven by a decline in turnover.
- Turnover fell from a record £1.25 billion to £991.6 million, impacting UK sales, though US sales saw moderate growth.
- Over 1,000 jobs were eliminated within the group as part of structural changes, following the sale of Ebuyer.
- Strategic investments in manufacturing facilities were prioritized to support long-term growth, despite current financial challenges.
The parent company of Wren Kitchens, West Retail Group, has encountered financial challenges, recording a pre-tax profit of £35.1 million for 2023. This is a significant downturn from the previous year’s pre-tax profit of £75.8 million. The last comparable low was in 2017, with a profit of £17.7 million. This decline highlights the financial difficulty the company has faced in the past year.
The company’s turnover witnessed a reduction from £1.25 billion to £991.6 million, echoing a similar downturn in profits. Notably, UK sales fell from £1.22 billion to £948.6 million. However, a silver lining appeared in the US market where sales grew from £28 million to £42.9 million. Despite the positive US performance, the overall turnover did not meet previous highs.
A critical move during this period was the divestment of the group’s stake in the online consumer electronics retailer, Ebuyer. Concurrently, the company’s workforce shrank from 8,628 to 7,641, reflecting over 1,000 job cuts. These changes underscore significant operational restructuring at West Retail Group.
The company confirmed that the normalization of the kitchen market post-pandemic, coupled with elevated interest rates and cost-of-living pressures, contributed to these financial results. This challenging environment pushed the group toward strategic realignments, such as investing in its manufacturing capabilities.
In line with its long-term vision, West Retail Group made significant investments in expanding its manufacturing capacities. The completion of its state-of-the-art kitchen plant in Barton-upon-Humber and enhancements to the bedroom manufacturing facility in Howden are key achievements. This expanded capacity aims to enable a shift into new markets and mitigate supply chain risks.
The company also acknowledged that increased costs from operating multiple production sites have temporarily impacted financial results, specifically EBITDA. However, these investments are central to West Retail Group’s strategy to stabilize and expand its market presence in the future.
West Retail Group’s strategic restructuring and investment in manufacturing offer potential for growth despite recent financial setbacks.
