END. Clothing hit by logistics problems in latest year, but Q4 saw recovery

END. Clothing’s parent company Ashworth and Parker had a turbulent period in the 12 months to the end of March with newly filed accounts showing the business had to deal with the major challenge of a multimillion pound stock write-off.

Looking at the headline figures, turnover reached £221.1 million, up from £219 million. But gross profit was down to £67.67 million from £81.38 million. Operating profit fell to £8.8 million from £38 million and profit before tax was down to £9 million from £38 million. The net profit for the year was £7.1 million, down from £33.4 million in the previous 12 months.

The company had invested in its operations, platform and selling channels during 2022 to support its strategic global growth plans and also opened new stores in Manchester and Newcastle in the autumn. The Newcastle location was its first womenswear-only store and supported its continued strong growth in the womenswear area, both online and physically. 

But the accounts show that clearly, something went badly wrong here. The problems were linked to a new automated fulfilment system that caused logistical problems and essentially got in the way of both the company and customers having a smooth ordering experience.

Its new stock system was implemented mid-year and was meant to improve inventory management and simplify the integration with existing systems but didn’t quite work out as planned. 

Management took action to minimise the impact on customers by reducing marketing and promotion activities in order to slow down website traffic, and it added extra fulfilment staff until the operations recovered. But the net result was that trading was adversely affected for several months, while the company incurred additional costs and took that significant stock write-off.

The company also said it was impacted by the withdrawal of franchises from key brands. It was reimbursed for any residual stock for these franchises and added that it continues to work with key suppliers to introduce “new exciting brands and products during 2023 to make up for any loss”.

Despite all of this, the retailer said it recovered well in Q4, and as mentioned earlier, turnover for the full year did manage to rise. But margins were impacted by the additional costs incurred because of the problems, as well as due to a higher level of discounts required to return the business to a normalised level of stock. 

The company remains upbeat for the future though and highlighted its investment in its team. During the period, Parker Gundersen and Karen Dracou joined as CEO and CFO, respectively. And they brought with them some hefty experience, Gundersen having been president of retail operations at LVMH’s DFS subsidiary as well as CEO of Zalora. Dracou, meanwhile, has significant experience with UK retailers, including M&S and John Lewis.

And the company said its loyal customer base continues to grow globally with it currently having around 7.5 million email subscribers and 3.6 million social media followers. 

It grew its international footprint towards the end of the period as well with its Italian subsidiary opening its first store in Milan in February. That was also the first store outside of the UK.

END. believes that its successful entry into the Milan market “has laid a solid foundation for future international growth”. Since the opening, it has seen “sustained increased traffic from within the region”.