Leeds Group, an Anglo-German textiles firm, has recently released its financial report for the 2020 fiscal year, highlighting the challenges it faced due to strong competition and the impact of the Covid-19 pandemic. The company, which specializes in producing textiles for home dressmakers, small designers, and other small apparel businesses, saw a decline in group revenue from £38.9 million in the previous year to £35.07 million.

The pre-tax losses also increased from £1.3 million to £2 million, indicating the difficulties faced by the company in maintaining profitability. Additionally, the operating loss from continuing activities grew from £1.05 million to £1.75 million. The Hemmers and KMR operations of Leeds Group were especially affected by adverse trading conditions. Hemmers faced intense competition both domestically and internationally, despite receiving financial support from the German government. This, coupled with reduced sales, led to losses for Hemmers and KMR during the year.

Jan Holmstron, Chairman of Leeds Group, acknowledged the challenging year faced by the firm and attributed it to increased competition and pricing pressures in the wholesale and retail textile markets. The Covid-19 pandemic also significantly impacted trading during the last three months of the financial year. The Hemmers-Itex Textil Import Export and Stoff-Ideen-KMR businesses were heavily restricted when the German government implemented a nationwide lockdown in response to the pandemic. Hemmers’ wholesale business suffered as a result, and KMR’s retail shops remained closed from mid-March to mid-April 2020.

To mitigate the impact of these challenges, the company’s directors implemented cost-cutting measures identified through a strategic review. The focus was on the core business and aligning the cost base with sales levels. Despite the ongoing effects of the Covid-19 situation on the marketplace, the sales levels for Hemmers and KMR in the initial months of the new financial year have exceeded expectations. The directors are confident that both businesses are better prepared to manage risks and can benefit from government financial support. However, the Chairman cautioned that future local or country-wide restrictions could once again impact trading.

In terms of divisions, Hemmers’ wholesale business experienced significantly lower sales compared to the previous year, dropping from £30.9 million to £27 million. The German market witnessed a considerable decline, and Hemmers faced increased price pressure from competitors. As a result, the gross contribution percentage decreased from 36% to 31%. Hemmers is now focused on growing its domestic and international wholesale markets by implementing a more customer-focused sales strategy. The company believes that these efforts will better position Hemmers to compete globally and regain lost market share in the upcoming year.

KMR’s retail business, on the other hand, saw a marginal decline in sales from £8.6 million to £8 million. However, the gross contribution percentage increased slightly from 50% to 53% compared to the previous year.

Overall, Leeds Group is aware of the difficulties faced during the past year but remains optimistic about the future. By implementing cost-cutting measures and refocusing on core business strategies, the company aims to overcome the challenges posed by competition and the ongoing Covid-19 pandemic.

Useful links:
– [Textile Today](https://www.textiletoday.com.bd/)
– [The Guardian – Fashion](https://www.theguardian.com/fashion)