Johnstons of Elgin, a renowned textiles company, is bracing itself for a significant decline in sales this year as a result of the Covid-19 pandemic. CEO Simon Cotton predicts that revenues could plummet by over 30% in 2020, but he remains hopeful for a slow recovery in 2021. This gloomy projection comes on the back of a successful year in 2019, where the company achieved sales of £77 million, largely driven by international demand.

Cotton revealed that the company had to furlough almost its entire workforce during the lockdown period as both its mills and retail stores had to shut down. However, the good news is that they have recently reopened. Johnstons of Elgin operates two mills based in Elgin and Hawick and, in 2018, it opened a flagship store in the luxurious shopping district of Edinburgh.

Despite the expected decrease in sales, Johnstons of Elgin, which generated profits of £6.4 million last year, assures stakeholders that it has the financial resilience to navigate through this uncertain period. The brand secured funding from the Royal Bank of Scotland under the Government-backed Coronavirus Large Business Interruption Scheme, and it maintains a strong balance sheet. Cotton expressed confidence in the long-term future of the company, stating, “Despite the very difficult situation in 2020, we are extremely optimistic about the future in the longer-term.”

Apart from the challenges posed by the Covid-19 crisis, Johnstons of Elgin also anticipates a decline in sales due to the uncertainty surrounding Britain’s trading relationship with the European Union. In 2019, exports accounted for nearly £30 million in sales for the company. Cotton emphasized the importance of maintaining tariff-free access to the European Union and the Japanese market where the brand conducts significant export business. He expressed hope that agreements will be reached to ensure continued trading without any additional duties in these crucial markets.

Having been established over two centuries ago, Johnstons of Elgin has built a strong reputation as a leading knitwear manufacturer. In addition to their flagship store in London’s prestigious Bond Street, the company also operates retail spaces in Elgin, St Andrews, and Hawick. Unfortunately, their store in Nantucket, United States, closed at the end of 2019. Despite the challenges posed by the current circumstances, Johnstons of Elgin remains steadfast in its commitment to its heritage and is prepared to weather the storm, emerging stronger in the long run.

Useful links:
1. Johnstons of Elgin Official Website
2. BBC News Article on Johnstons of Elgin