Hobbs, the popular womenswear brand, has recently released its financial results for the fiscal year ending in March 2020. Prior to the Covid-19 pandemic, the company had been performing well and exceeding its forecasted expectations. However, the spread of the virus gradually impacted consumer sentiment and resulted in a decrease in footfall in their stores. As a result, Hobbs’ turnover for the year reached £133 million, slightly lower than the previous year’s figure of £135.4 million.

Despite the challenges posed by the pandemic, Hobbs has shown resilience. The headline gross margin for the year dropped to 60.3% from 61.4%, largely due to fluctuations in foreign exchange rates and wholesale sales to subsidiaries and third-party partners. Adjusted EBITDA also saw a slight decrease from £21.9 million to £20.2 million, and operating profit decreased from £10.7 million to £7.6 million. Profit after tax was recorded at £4.3 million, down from £6.3 million in the previous year.

These financial results come after Hobbs successfully returned to profitability in the preceding financial year, following a period of difficulty. However, the company is expected to face its most challenging 12 months in a long time due to the Covid-19 pandemic, which began in April 2020. Although detailed information about the company’s performance in the months following the end of the financial year is not provided, it is clear that the pandemic had a significant impact on Hobbs’ operations.

In response to the crisis, Hobbs took swift actions to strengthen its financial position. This involved implementing cost-reducing measures, negotiating with suppliers and landlords, and taking advantage of government support initiatives such as the job retention scheme. The company also received support from its parent company, The Foschini Group. Additionally, Hobbs underwent a restructuring program at its head office and retail teams to ensure its ability to weather prolonged store closures and to establish a cost base suitable for the post-pandemic future.

While these proactive measures demonstrate Hobbs’ determination to navigate the challenges posed by the pandemic, the brand’s recovery may be delayed. The company’s ability to bounce back fully will depend on various factors, including the duration and impact of the ongoing pandemic. Nonetheless, Hobbs remains committed to its long-term success and is determined to emerge from this period even stronger.

Useful links:
1. Hobbs Official Website
2. The Foschini Group Official Website