Victorian Plumbing is planning to shut down Victoria Plum after a significant financial loss following its acquisition.
- The company acquired Victoria Plum in May but has faced an almost £2m loss since the purchase.
- Operations are expected to cease by 31 December following a workforce consultation.
- CEO Mark Radcliffe views the closure as an opportunity to enhance growth and boost investment in the brand.
- Despite the loss, the retailer expects to meet adjusted EBITDA targets due to strong customer demand.
Victorian Plumbing, having acquired its competitor Victoria Plum in May, is now set to close it due to a financial setback of nearly £2m. This decision comes after a detailed consultation process with Victoria Plum’s employees, and the shutdown is scheduled for completion by the end of December.
Mark Radcliffe, the CEO of Victorian Plumbing, has stated that closing Victoria Plum will provide significant opportunities for the company to accelerate growth. He emphasized enhancing their brand and marketing investments as a primary focus post-closure. This strategic move is seen as an effort to strengthen their market position following the loss incurred.
Despite the challenges faced with Victoria Plum, Victorian Plumbing remains optimistic about its financial performance. The company expects its adjusted EBITDA for the fiscal year ending in September to align with market expectations. This confidence is largely driven by robust customer demand.
The company’s revenue experienced a 4% increase, driven by a 10% growth in order volumes, setting a new record of surpassing one million orders. However, excluding the acquisition of Victoria Plum, like-for-like revenue saw a slight decline of 1%.
According to Radcliffe, the strategy around their own brand continues to resonate well with customers, leading to significant gross margin improvements. He noted the importance of their high-margin own brand proposition in consolidating their leading position as the UK’s number one bathroom retailer.
The operational capabilities have been further enhanced with a new 544,000 square feet semi-automated distribution center in Lancashire. Now operational, this center dispatches more than half of the company’s daily orders and is expected to handle all orders by year-end. Radcliffe highlighted that this would “remove previous capacity constraints, enabling us to serve customers more efficiently and execute on our strategic growth plans.”
Victorian Plumbing’s strategic decisions underline a commitment to resilience and growth amid financial challenges.
