Edinburgh Woollen Mill cuts Jaeger losses, creates luxury division
Philip day’s Edinburgh Woollen Mill Group has reported higher profits and further expansion in its luxury ops. The multi-brand group made net profit of £23.4 million in the 27 weeks to March 2 with operating profit margins rising to 10.25% from 8.27%.
It's hard to make meaningful comparisons with the previous period as that covered 78 weeks up to August 2018, but that margin increase is undeniably good news. Revenues in the 27 weeks reached £327.14 million and in the previous 78 weeks they had been £935.8 million.
The company also said that Edinburgh Woollen Mill itself (as opposed to the EWM group as a whole) saw net profit of £12 million, while the Peacocks chain made £17 million. Additionally, Jaeger’s losses "reduced substantially" to £1.1 million as it expanded its standalone store estate by seven locations (and has since added a further four, as well as even more concessions). Jaeger lost £7.1 million in the year prior to its administration, with the latest performance “marking a remarkable turnaround in fortunes for the brand,” we’re told.
The company said that the results show its continuing financial strength, “its commitment to investment, and the loyalty of its customer base in the face of a challenging retail environment”.
The results announcement focused heavily on its premium-to-high-end 'luxury tailoring division' that includes Jaeger. Since March, it has also taken in the Austin Reed, Berwin & Berwin (including Baumler) and the Jacques Vert (including Dash, Eastex and Windsmoor) businesses.
EWM has been spending heavily on its luxury offer and as well as its new stores has also continued to invest in the digital proposition, launching new dedicated e-commerce platforms for all the brands.
A group spokesperson said: "In the face of a challenging retail environment, our relentless commitment to customers and their wants and needs has allowed us, again, to stand out from the crowd.
“The turnaround in Jaeger's fortunes validates our heavy investment in the brand and our commitment to hiring top industry talent. It also validates our approach of replacing the company's previous reliance on an unsustainable low-margin, discount-led marketing strategy with our plan to re-establish Jaeger as a badge of quality, which has been done effectively”.
The acquisitive company also highlighted its strong cash position and lack of debt, which makes us think its brand buying spree is far from complete.
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