Lustre taken off golden quarter for In The Style by COO departure
There was mixed news from In The Style on Wednesday. Although the digital womenswear fashion brand announced it had performed strongly over the ‘golden quarter’, it also revealed its CFO and COO Paul Masters is having to leave due to ill health.
Masters, who “has played an integral role in driving the company's growth, including leading the business through its successful IPO", will step down in March “to focus on his health”. At the same time, Richard Monaghan will succeed him in the role of CFO, joining in mid-March from Victorian Plumbing. New CEO Sam Perkins will take on the additional role of COO.
Returning to the positive financial statement, In The Style said trading across the eight weeks to 31 December continued its “excellent” run of growth, based on retailer’s influencer collaboration model.
Total net sales for the period increased 21.5% year-on-year to £11.2m, or by 225.9% on a two-year, pre-pandemic basis.
There was also continued growth in its wholesale channel, comprising both digital and retail partnerships including ASOS, Lipsy and ASDA.
Growth was driven by a "very strong" performance across the group's direct to consumer (DTC) e-commerce channel, which comprises the In The Style website and proprietary app. DTC net sales (that is, after customer returns), increased 34.5% year-on-year to £9.1m, representing an increase of 204.7% on a two-year basis. Sales through the In The Style App increased by 72.3% year-on-year and represented 67.1% of total sales for the period.
At the same time, gross order value also increased 41.4% to £15.2m on a strong comparable performance, “reflecting growing customer demand for the In The Style brand”. On a two-year basis, this represents growth of 178.4%, it noted. Returns rates were also cut over the period versus H1, it said.
Additionally, there was further progress across operational KPIs, including average order value, website visits and conversion rate.
That meant top-line growth remained in line with expectations, “despite the ongoing industry wide headwinds caused by supply chain constraints”.
“This positive momentum was underpinned by the continued expansion of In The Style's differentiated influencer model, including a number of well-received launches of new influencer partnerships and very successful collection launches with existing influencer partners”, the retailer said.
The group also experienced “very strong” consumer demand across its partywear and seasonal categories, “in particular its very popular festive family pyjama ranges and charity Christmas jumper collection”.
However, there was a mix of the positive and not-so-positive in its outlook. The plusses include the group anticipating strong revenue growth for the financial year ending 31 March in the range of £55 million-£57 million, in line with market expectations.
The negative surrounds ongoing industry-wide supply chain issues. As a result, the retailer expects additional cost pressures as well as extended transit times. This means an increased level of discounting to clear some ranges ahead of subsequent launches and the group expects some launches scheduled for Q4 to fall into FY23, “resulting in a smaller volume of full-price sales launches in Q4.
“As a result of these supply chain constraint issues, the board now anticipates reporting a FY22 adjusted EBITDA margin in the range of 1% to 2%”.
But Perkins remained upbeat: “The group has continued its excellent growth to achieve a strong sales performance during the important golden quarter. This outcome was achieved despite the well-documented uncertainties facing both consumers and retailers during the period and is testament to the appeal of the In The Style brand, continued positive momentum across several key customer metrics, and the success of our recent influencer collaborations. We have a strong pipeline of new partnerships and collection launches.”
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