FatFace experienced a financial downturn following its acquisition by Next.
- The company reported a pre-tax loss of £3.2m for 35 weeks ending 27 January 2024.
- Revenue saw a decrease from £205.4m to £191.6m for the same period in the previous year.
- Exceptional costs of £7.9m were largely attributed to the acquisition.
- Despite challenges, trading profit before tax improved slightly to £19.5m.
FatFace, a fashion retailer, reported a pre-tax loss of £3.2 million for the 35 weeks leading up to 27 January 2024. This change comes after the company was acquired by Next, which resulted in an adjustment of FatFace’s reporting period to align with its new owner.
Revenue for FatFace declined from £205.4 million to £191.6 million compared to the same 35-week period in the previous year. This decrease indicates a challenging market environment and reflects changes post-acquisition.
The company faced ‘exceptional costs’ totalling £7.9 million during this period. Most of these costs are associated with the acquisition process by Next. This substantial figure highlights the financial impact of the acquisition on the company’s bottom line.
Despite the overall loss, FatFace achieved a slight improvement in trading profit before tax, which rose to £19.5 million from £18.8 million in the previous year. This growth in trading profit suggests a focus on improving profit margins over merely increasing sales volume.
Chief Executive Officer Will Crumbie expressed confidence in the company’s performance amidst challenging conditions, citing a strategic focus on full-price sales contributing to improved profit margins. He highlighted the appeal of FatFace’s products to their expanding customer base and underscored the importance of both physical stores and digital platforms.
FatFace’s restructuring and alignment with Next appear aimed at sustainability and profitability, even as they navigate the transition after the acquisition.
FatFace’s strategy post-acquisition shows an emphasis on profit margins despite financial challenges.
