Womenswear brand In The Style has lowered its full-year profit outlook as a drop in demand and other factors impacted the important Christmas quarter.
The Manchester-based company reported a 22 percent drop in revenue in the three months to December 31, while direct-to-consumer (DTC) revenue fell 13 percent.
It comes after the company launched a strategic review last month which resulted in chief executive officer Sam Perkins stepping down after just a little more than a year in the role.
Commenting on the latest quarterly results, In The Style's founder and interim CEO Adam Frisby said the company had an “encouraging performance in November”, but things were “challenging” in December as consumers tightened their purse strings amid the cost-of-living crisis, and high industry markdowns and delivery disruption hit the business.
The company said it “managed stock levels well” through the peak trading months, closing the period with 3.2 million pounds in stock compared to 3.6 million pounds a year earlier.
Based on its lower than expected revenue and gross margins, In The Style now expects to report an adjusted EBITDA loss of between 4.25 million pounds and 4.75 million pounds for the year.
In The Style expects FY revenue drop
It expects a drop in revenue to around 46 million pounds, “reflecting market-wide cost-of-living pressures on consumer demand, higher levels of markdowns and a reduction in wholesale demand”.
In its most recent full-year results for the 12 months to March 31 2022, In The Style posted revenue of 57.3 million pounds, up 28 percent on the prior year.
In that same period, the business swung to a pre-tax loss of 1.5 million pounds compared to a profit of 125,000 pounds the year before.
Frisby said that despite the ongoing challenges, the company is encouraged by the positive customer reaction to its new own brand range, FITS.
He said: “We are firmly focused on launching exciting, unique and inclusive new collections for our customers in collaboration with our influencer partners as well as tightly managing stock, costs, and cash. I remain absolutely confident in the fundamental strengths of the In The Style brand as well as our differentiated model.”