Fishing Republic reports 2017 loss following ‘disappointing’ performance
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UK retailer Fishing Republic today reported a loss for 2017 of £2.256m, compared to a 2016 profit of 0.403m.
The group’s trading results to December 31st revealed a significant sales underperformance, a deterioration in gross profit and a soaring cost base.
Revenue for the year increased to £9.153m from £5.799m the previous year, reflecting an ambitious store opening programme, but was below management targets. Store sales increased to £6.743m and accounted for 74% of sales. Like-for-like store sales were up 12.4%.
Gross profit, after exceptional inventory write down of £0.568m, was £2.415m compared to £2.760m in 2016. Gross profit margin, heavily impacted by a deterioration in trading in Q4, fell from 47.6% in 2016 to 32.6%.
Selling, distribution and administration expenses increased substantially to £3.961m from £2.345m last year, reflecting the increase in the scale of the group’s operations.
Fishing Republic’s Executive Chairman, James Newman, said firm action is being taken to address the Group’s disappointing performance and that 2018 will be a year of transition.
Fishing Republic initiated an appraisal of its operations in mid-November and made a number of Board and management changes. Turnaround plans, supported by a £1.3m (gross) share placing in January, are in place, says the report.
“Following the completion of that review we are in the process of carrying out a number of organisational and operational changes, which are being implemented by a new and strengthened senior management team,” said Newman. “The recruitment process for a new Chief Executive is approaching its final stages.
“Steve Kyriacou, recently appointed as Chief Operating Officer, is leading the management team on a day-to-day basis and coordinating the initiatives we are putting in place.”
The Group’s underperformance in e-commerce was highlighted in the review and initiatives to improve performance will focus on online sales in particular. Five destination stores have been closed since January, highlighting the change in emphasis.
Online sales increased to £2.410m from £1.656m in 2016, and were ‘significantly below’ management expectations. Online margins were also adversely affected by competitive pricing and by a major stock clearance in the last two months of the year. An enhanced website and a new distribution centre represent the shift in the group’s business model.