British fashion label Paul Smith has reduced its losses in the fiscal 2022 year as it “recovered strongly” from the pandemic, but warned it continues to face headwinds.
In the year to June 30, the company’s loss narrowed to 8.09 million pounds from 25.28 million pounds a year earlier, while its operating loss reduced to 7.52 million pounds from 24.38 million pounds.
That came as its gross margin improved thanks to higher volumes, stock efficiencies, and more sales at full price as Covid restrictions eased.
Turnover for the year increased to 146.9 million pounds, up 19 percent from the 123.8 million pounds it reported a year earlier.
The company said the financial results reflected the mitigating steps it took during the pandemic and the increased demand for its products since its end.
The company hailed a strong recovery but added that it “continues to face challenges including the impact of rising inflation, and low consumer confidence”.
“The easing of Covid restrictions altered the mix of retail sales between physical shops and e-commerce for our own retail as well as our wholesale customers,” it said.
Retail sales in the year increased by 37 percent overall and 38 percent on a like-for-like basis as shoppers flocked back to physical stores following the end of lockdown restrictions.
But that impacted direct e-commerce sales, which represented 42 percent of overall retail sales, down from 51 percent a year earlier.
“The conflict in Ukraine and resulting inflationary pressures are expected to provide continued challenges in our market,” the company said.
But it also said it has seen “some very encouraging signs of growth, particularly in our tailoring categories and increasing footfall in some of our larger shops as customers return to city centres”.