In a significant shift, FatFace recently reported a notable financial downturn following its acquisition by Next, marking an adjustment period for the brand.
- FatFace recorded a pre-tax loss of £3.2m during the adjusted reporting period as it aligned with Next’s financial calendar.
- Revenue for FatFace declined from £205.4m to £191.6m compared to the same period last year.
- Despite the loss, trading profit before tax showed a marginal increase from £18.8m to £19.5m.
- ‘Exceptional costs’ linked to the acquisition totaled £7.9m, impacting overall financial performance.
FatFace, a prominent name in the fashion retail industry, has found itself navigating financial challenges in the wake of its recent acquisition by Next. The company registered a pre-tax loss of £3.2 million over a 35-week period ending January 27, 2024, reflecting its strategic alignment with Next’s reporting calendar. In comparison, the brand had reported a statutory profit before tax of £19.5 million for the full 2023 financial year.
The realignment of FatFace’s reporting period to match that of its new owner, Next, underscores a period of significant transition. Revenue for this condensed timeframe declined to £191.6 million, a drop from the previous year’s figure of £205.4 million for the same period. This decline points to the strategic shifts and adjustments being undertaken by the company.
Despite the overall financial setback, there was a silver lining. The trading profit before tax exhibited a slight increase, climbing to £19.5 million from £18.8 million when compared to the previous year. This improvement was attributed to a sharpened focus on enhancing profit margins as opposed to prioritizing sales growth, indicating a tactical pivot in business strategy.
A major contributing factor to the financial outcome was the ‘exceptional costs’ amounting to £7.9 million incurred during this period. These costs were primarily associated with the acquisition process and were significant enough to affect the overall financial landscape for FatFace. CEO Will Crumbie highlighted the robustness of the brand’s performance amidst a challenging external environment, emphasizing the sustained appeal of their products among a growing customer base.
As the brand continues to adapt, Crumbie underscored that both their physical stores and digital platforms remain crucial components of the business model. His confidence in the brand’s appeal reflects an optimism for recovery and growth despite the current hurdles.
FatFace continues to navigate financial challenges post-acquisition, focusing on margin improvements amidst external pressures.
