FatFace, the fashion retailer, reported a significant financial setback following its acquisition by Next in 2023.
- The company announced a pre-tax loss of £3.2m for the 35-week period ending January 27, 2024, compared to a £19.5m profit the previous year.
- Charges amounting to £7.9m, mostly linked to the acquisition by Next, were highlighted as substantial contributors to the losses.
- Sales for the period totalled £191.5m, with UK-specific revenue reaching £172.5m.
- CEO Will Crumbie remains optimistic, focusing on product appeal and digital presence despite challenges.
FatFace, a notable player in the fashion industry, revealed a marked downturn in its financial performance, attributed largely to its recent acquisition by the giant retailer, Next. The transaction, valued at £115m, took place in October 2023 and has since been central to FatFace’s financial narrative.
During the 35-week period concluding on January 27, 2024, FatFace reported pre-tax losses of £3.2m. This figure starkly contrasts with the £19.5m profit recorded in the previous financial cycle, indicating a significant reversal in fortunes. Exceptional costs of £7.9m were cited, mainly associated with the acquisition process by Next.
Despite the financial losses, FatFace reported sales amounting to £191.5m. Of this, £172.5m was generated from the UK market alone. These figures suggest a robust retail presence, albeit overshadowed by the acquisition-related costs.
Will Crumbie, the CEO of FatFace, commented on the company’s resilience amid a challenging market environment. He stated that a strategic focus on full-price sales had enhanced margins and profit before tax. Crumbie also emphasised the brand’s strong product resonance with its expanding customer base.
Moreover, Crumbie highlighted the enduring appeal of FatFace’s brick-and-mortar stores and the significance of its digital operations. These elements are viewed as integral to maintaining customer engagement and competitive positioning in the dynamic fashion sector.
The acquisition by Next has undoubtedly impacted FatFace’s financials, yet strategic focus areas provide a foundation for potential recovery.
