Fat Face reports robust revenue growth of 11.9 percent in FY14

In its annual report for the 52 weeks to May 31, 2014, Fat Face said that its revenues grew by 11.9 percent to exceed 200 million pounds (310.7 million dollars) for the first time and a focus on improving gross margin throughout the group ensured that the conversion of sales to EBITDA was strong. Adjusted EBITDA for the year was 39.3 million pounds (61 million dollars), 26 percent ahead of last year, a very strong year-on-year performance.

The business witnessed a good summer season and a strong Christmas period. The group continues to pursue a full price offering and the decision not to discount in the run up to Christmas was a key element of this strategy. As a result, Christmas week was the best company sales week ever and the e-commerce business saw a record breaking single day of sales on Boxing Day. Investment in the business continued with focus on enhancing the store portfolio and strengthening the IT platform.

“The Group has a good pipeline of new space in the UK and identified opportunities to relocate and expand existing stores during the coming year. The first steps into the US will also start in 2015,” said Stuart Rose, Chairman of Fat Face Group.

Retail sales were 197.8 million pounds (307.3 million dollars), up 12 percent. Revenue growth was generated through a combination of new space and like-for-like sales growth. Average trading space increased by 4.7 percent reflecting the net impact of new stores, relocations and closures in the store estate this year and the annualisation of last year’s activity. Like-for-like sales growth was strong at 7.6 percent, building on the 8.6 percent achieved last year and giving us the fourth consecutive year of positive like-for-like sales. Group’s 209 strong stores are well spread across the UK and Ireland offering good reach to the customers. During the year we added 9 new stores and 7 relocations.

Sales in e-commerce business too grew by 39 percent during the year and now accounts for 15 percent of total group revenue. Other revenue saw reduction of 8.3 percent on the previous year, primarily the result of the decision made last year to focus on key wholesale relationships with strong brand fit. In January 2014 the company entered into a new sale or return agreement with The John Lewis Partnership to sell FatFace womenswear in 21 John Lewis stores and through JohnLewis.com.

The company admits that the outlook for the year ahead remains challenging and the market is expected to remain highly competitive, however, consumer confidence continues to improve. Despite the market remaining highly competitive, by continuing to focus on developing the product ranges, enhancing our store portfolio and retaining focus on cost and cash management, FatFace expects a strong growth.