Monsoon cuts losses but profits stay elusive

Monsoon Accessorize went through what it called “probably the most difficult” trading environment in its history in the year to August 27, although it would be interesting to hear whether the period since was even worse as it was for so many of its retail peers.


Monsoon


For now though, we don’t know, so it’s left to its latest set of annual results to underline the challenges the company faces.

It said in its figures for the 12 months to late August that its post-tax loss narrowed by 32% to £12.6 million, while operating losses fell by over 40% to £10.4 million.

But the company is clearly not out of the woods as it still hasn’t swung back to a profit, although it’s making money on at least one measure - its Ebitda rose 18% to £23.9 million, a strong contrast with the prior year when the figure fell by as much as 16%.

Turnover edged up very slightly to reach £423.7 million from £422.1 million in the previous year.

CEO Paul Allen referred to the tough conditions during the 12-month period but said the company “focused on the continued turnaround of the business, in particular the performance of the Monsoon brand.” He added that “against a demanding retail environment, we made progress in implementing our plans and the results reflect this.”

But he also said that the company is seeing declining footfall to its UK stores, as is the rest of the retail sector, and this dented like-for-like sales. Online turnover is rising but isn’t yet high enough to offset the stores decline and the firm is continuing “to look at ways of mitigating the impact of our poor store performance.”

The company has been de-linking its Monsoon and Accessorize stores and closing some sites. More closures are expected.

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