Studio Retail sales soar, ends sale process
Studio Retail Group updated on its recent performance on Monday and also shared the news that it's no longer for sale. The company said it had received plenty of non-binding offers for the business, but its recent strong trading suggests that it can create greater value for shareholders as a pureplay retailer via Studio.co.uk.
To further this ambition it has also sold its Findel Education operation for around £30 million.
Studio, which sells fashion and general merchandise at value prices, said it saw a record trading performance in the year to March 26. And its adjusted pre-tax profit from continuing operations should sit between £48 million and £50 million, which would be up between 75% and 83% compared to the previous year.
Its medium-term goal is to achieve revenue of £1 billion. It’s clearly nowhere near that yet (in its latest half-year, its revenue was £268 million), but it’s still in a good place.
It didn’t put financial figures on what happened in Q4, but it said that trading in the traditionally quieter final quarter was “exceptionally strong”. Product sales in Q4 were 88% ahead of the prior year, with gross margin rates from product sales 650bps higher. This performance contributed to product sales growth of 43% for the full year, with gross margin rates up 290bps year-on-year. Over the period, government support was either repaid or not claimed and had no impact on profitability.
It also said that the business has seen a step-change in its active customer base this year. The total customer base of 2.5m was up 36%.
And the proportion of sales coming from the Studio App, downloaded by over a million customers, increased to 25%+ during Q4.
CEO Paul Kendrick said of all this: “Studio has seen strong trading during the financial year whilst successfully managing the operational challenges of the pandemic, which, along with the sale of Findel Education, creates a step-change in our financial position. We start the new financial year from a position of focus and strength, with the growth in our customer base demonstrating the success of our leading online value retail and integrated financial services offer.”
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