Leeds Group, a UK-based fabrics and haberdashery wholesaler and retailer, continues to face challenges brought on by the ongoing Covid-19 pandemic. Despite hopes of a gradual recovery in trading levels, the company has not seen this materialize, especially at its Hemmers and KMR Germany operations. The combined impact of the pandemic and the emergence of the Omicron variant has significantly affected consumer confidence, resulting in overstocking and decreased demand among customers. Although Germany has not imposed nationwide lockdowns, restrictions aimed at curbing the spread of the Omicron variant have directly impacted retail operations.

Sales at Hemmers and KMR have declined by 19% and 33% respectively compared to the previous year, in line with reductions reported by other competitors in the industry. Consequently, the group’s turnover for the first half of the year dropped to £15.6 million from £19.95 million the previous year. Hemmers experienced a turnover decrease from £15.6 million to £12.67 million, while KMR’s turnover dipped from £4.36 million to £2.9 million. The company also faced a pre-tax loss of £487,000 during the six-month period, in contrast to the £735,000 profit reported in the previous year. Hemmers reported a loss of £192,000, while KMR reported a loss of £242,000.

As of November 30, 2021, the net debt for Leeds Group rose to £5.87 million, compared to £4 million the previous year. This increase is attributed to the reduced level of trading and elevated stock levels due to the season. To mitigate the impact, the company intends to further reduce costs and seek additional financial support from the government in the second half of the year.

Chairman Jan G Holmstrom acknowledges the ongoing uncertainty in the short-term business outlook due to the prolonged nature of the pandemic and the emergence of new variants. However, he remains optimistic that as immunity in the population increases, normal trading levels and profitability will eventually be restored in the medium term.

Useful links:

1. Leeds Group Official Website
2. Government Financial Support for Businesses