Fashion wholesale group Whispering Smith, based in Manchester, has experienced a decline in sales and recorded a loss in its accounts for the year ending in March. The company’s revenue dropped by 26% to £51.3 million, which marks a return to pre-pandemic levels. As physical stores reopened after the Covid-19 lockdown, the trading environment became more challenging, particularly for Whispering Smith, whose customer base consists mainly of e-tailers.

The decline in sales can be attributed to several factors. One of the main reasons is the excessive inventory held by its e-tailer partners, resulting in a temporary decrease in demand. Additionally, the company faced high costs associated with importing goods into the UK and significant foreign exchange losses due to the falling US dollar exchange rate. Consequently, the gross profit decreased from £14.5 million to £8.5 million compared to the previous year, and the company incurred an operating loss of £4.8 million.

Despite these challenges, Whispering Smith remains positive about its future prospects. The company sees the potential for a return to profitability next year as margins improve and freight costs return to pre-pandemic levels. Furthermore, the stability of the GBP/USD foreign exchange rate is expected to help mitigate foreign exchange losses.

In order to strengthen its business, Whispering Smith has introduced the Legacy Studios brand and acquired the Good For Nothing label. These additions complement the company’s already well-established brands, Brave Soul and Night Addict, and are expected to broaden its target consumer base and enhance economies of scope.

Although Whispering Smith faced difficulties in the past year, it is hopeful and determined to navigate through the challenging retail landscape. With strategic measures in place and a focus on improving profitability, the company aims to regain its position in the fashion wholesale industry.

[Link 1: Whispering Smith official website](https://www.whisperingsmith.com/)

[Link 2: Legacy Studios website](https://www.legacystudios.com/)