Brand Architekts experiences a 15% sales decline amidst strategic pivot.
- Despite a sales drop, Brand Architekts reports improved profit margins.
- Cost-of-living crisis and discontinuation of brands impact sales.
- Flagship products like The Solution and Skinny Tan show strong performance.
- CEO Quentin Higham discusses company progress and future plans.
Brand Architekts, known for brands such as Skinny Tan and Super Facialist, is witnessing a significant strategic transformation as it focuses on fewer, larger brands. For the fiscal year ending June 30, the company reported a 15% fall in sales, amounting to £17 million, a decline from £20.1 million in 2023. This reduction is attributed to the discontinuation of less profitable brands and external economic factors like the cost-of-living crisis and an unusually wet spring.
However, the company successfully maintained a more robust financial footing, as indicated by an increase in its gross profit margin by 1.5% to 41.2%, despite an underlying loss of £0.4 million, marking an improvement from the previous year’s £1.2 million loss. The enhanced margin reflects Brand Architekts’ strategic focus on optimizing its brand portfolio and cost management.
Flagship products emerged as bright spots amidst the sales slump. Sales of The Facialist skincare brand rose by 17%, while The Solution menopause products surged by 43%. Skinny Tan’s Body Glow, available in major retailers like Boots, Superdrug, Asda, and Tesco, was identified as a rapidly growing product in the tanning market since its launch.
Financial adjustments included a decrease in net cash to £7 million from £8.2 million, influenced by the acquisition of MR Haircare and associated legal costs for the purchase of the men’s grooming brand Fish. The legal resolution of a claim tied to the 2018 acquisition further impacted financials, with a settlement cost of £200,000 and additional legal fees amounting to £225,000.
CEO Quentin Higham expressed optimism, citing progress in portfolio rationalization, margin improvements, and a significant reduction in operational losses. He projected growth through increased consumer awareness, investment in customer acquisition, and a strategic plan for new product development and international expansion.
Brand Architekts remains confident in its strategic shift, aiming for profitability and long-term success.
