Missguided, the online retailer, has reported a rise in sales in the year leading up to March 29, 2020, despite incurring net losses. The company’s profitability on an EBITDA basis, along with its consecutive progress for the second year in a row, is a notable achievement. Furthermore, during the pandemic, Missguided managed to maintain its strong performance, with an increase in turnover.

In the fiscal year 2020, Missguided experienced an 8% growth in turnover, reaching £201.9 million after a previous decline. Although the company’s EBITDA decreased from £3.5 million to £2.118 million, this was expected due to substantial lease and inventory impairment provision releases in the previous year. However, the company did face challenges as its operating loss widened to £5.1 million, compared to £3.6 million in the previous year, and the net loss amounted to £8.3 million, following a loss of £4.6 million.

Despite the financial setbacks, Missguided achieved positive sales growth during the year. This was largely attributed to increased marketing activity, which helped boost brand awareness both domestically and internationally. The company also improved its gross margin, indicating better inventory control and a reduced need for markdowns. Additionally, Missguided’s wholesale and franchise channels experienced strong revenue growth, demonstrating their potential to generate substantial revenue in the future. However, the closure of physical stores in 2019, followed by the impact of the pandemic, adversely affected the company’s physical retail channel.

Despite the challenges posed by the COVID-19 pandemic, Missguided has emerged in a stronger position. The company secured an additional £19 million in shareholder funding, improving its financial stability. While online sales experienced a temporary dip prior to the UK lockdown, it was offset by a decrease in returns as consumers shifted towards categories with lower return rates, such as loungewear. Initially, the wholesale and franchise channels faced temporary setbacks due to orders being put on hold, but demand quickly rebounded and has been on an upward trajectory since.

In the current financial year, Missguided has witnessed a strong start and has successfully attracted new customers, particularly from international markets. The company has also maintained low return rates, although these may normalize as lockdown restrictions ease. With the current performance and confidence from management, Missguided is aiming to deliver another year of profitable growth in fiscal year 2021.

Useful links:
1. Missguided Official Website
2. Retail Gazette: Missguided’s Increased Turnover and Profits in 2019