Castore, supported by Andy Murray, reports a significant annual loss despite increased sales.
- The company experienced a pre-tax loss of £28.8m after previously making a profit.
- Extraordinary costs, including warehouse consolidation and stock provisions, impacted financial results.
- Efforts to streamline operations led to temporary operational challenges and increased costs.
- UK and international sales saw considerable growth despite financial setbacks.
Castore, a well-known British sportswear brand supported by prominent investors including Andy Murray and the Issa brothers, has encountered financial difficulties despite a notable increase in sales. The company recently documented a pre-tax loss amounting to £28.8 million for the year ending February 4, 2024, marking a sharp reversal from the previous year’s profit of £14.6 million.
In the outlined period, Castore’s turnover made a significant leap from £115 million to £190.3 million, yet this success was overshadowed by extraordinary costs totaling over £24.4 million. Notable expenses included £2.1 million directed towards warehouse consolidation and £9 million for stock provision. Furthermore, the company devoted £6.3 million to fundraising expenses and £3.8 million to address ‘onerous contracts’. Excluding these costs, operating profit underwent a drastic decrease from £16.5 million to a mere £399,148.
A statement from the board highlighted a strategic shift aimed at enhancing supply chain efficiency, which entailed consolidating UK warehouses. This move posed challenges, affecting both operations and customer order experiences. To manage these issues, management temporarily bolstered staffing levels and curtailed promotional activities. It was noted that trading suffered during the latter half of the year, and a significant stock write-off occurred due to missed clearance windows.
Despite these operational hurdles, Castore expressed confidence in overcoming short-term issues, believing that these changes will bring about future efficiency gains. Meanwhile, the company’s workforce expanded from 399 to 517 employees over the year. Sales in the UK soared from £79.8 million to £106.1 million. In Europe, sales grew from £25.3 million to £59.6 million. North American sales experienced an increase from £3.1 million to £4.4 million, and sales in other global regions tripled, rising from £6.6 million to £20.1 million.
Castore faces immediate challenges but is optimistic about future efficiencies and growth.
