Leeds Group, a textile wholesaler and retailer operating primarily in the German market, has faced a difficult year due to the ongoing Covid-19 pandemic. While many businesses in the UK are beginning to recover, Leeds Group’s journey to recovery is still ongoing.

The company’s operations in Germany have been severely affected by the stricter Covid restrictions implemented in the spring. These restrictions have hindered the trading activity of the textiles and haberdashery firm, resulting in another challenging year. Although some improvements were seen in the first half of the year, further countrywide restrictions imposed by the German government had a negative impact on the company’s trading activity in the second half of the financial year.

Both Hemmers, the wholesale business, and KMR, the retail stores operated by Leeds Group in Germany, have felt the impact of the restrictions. Hemmers’ wholesale business was affected by lockdowns in its export markets, although it was able to continue trading on a reduced scale. On the other hand, all KMR retail stores were fully closed during the country-wide lockdowns, with some stores remaining closed until the end of May due to localized lockdown measures. Despite the closures, management took steps to mitigate the impact and the company received financial aid from the government.

However, even after the lifting of lockdowns, sales continued to suffer. Total group revenue for the continuing operations in the year decreased to £33 million from £35 million in the previous fiscal year. Hemmers managed to achieve slightly higher sales compared to the previous year, primarily due to currency exchange effects. However, sales at KMR significantly declined due to the lockdowns, resulting in a decrease from £8 million to £5.34 million in the year.

As a result of the decreased sales, both Hemmers and KMR experienced losses after interest. Although the German government provided almost £1 million in financial support to the group, it was not sufficient to cover fixed overhead costs. However, the losses were reduced compared to the previous year, with a loss of £280,000 in 2021 compared to a loss of £1.75 million in 2020. The group’s loss before tax from continuing activities was also reduced to £508,000 from a loss of £2 million previously.

Despite the challenges, Leeds Group remains optimistic about its future. With a stronger management team in place and a restructuring effort aimed at aligning costs with sales activity, the company anticipates a return to profitable levels in the coming years, assuming a return to a normal trading environment. The company is hopeful that the worst impacts of the pandemic are in the past and looks forward to a brighter future.

Useful links:
Leeds Group Official Website
Hemmers Official Website