Outdoor clothing retailer Mountain Warehouse has released its financial results for the year ending in February, revealing the impact of Covid-19 and investment on its profits. Despite this, the company saw an increase in sales, indicating a positive outlook for the future.

Turnover for the year rose by 26.1% to £302.6 million, surpassing pre-pandemic levels by 2.6%. Retail sales experienced significant growth of 54.3%, despite disruptions caused by the pandemic. However, online sales fell by 5% as physical stores reopened, but remained higher than pre-pandemic levels at 63.3%. International sales accounted for 29.6% of the company’s total, slightly lower than the previous year’s 35.3%.

Unfortunately, Mountain Warehouse reported an operating loss of £102,000 compared to a profit of £7.9 million in the previous year. Net profit also decreased to £1.76 million from £5.5 million. The company attributed the decline in profits to the global pandemic, which included extended store closures and disruptions to the supply chain. Stores in the UK and Ireland were not able to reopen until April and May 2021, respectively, due to lockdown measures. Short lockdowns in other countries, such as Germany, Australia, New Zealand, and parts of Canada, further impacted the company’s performance.

The global supply chain disruptions led to delays in receiving stock, resulting in lower sales than expected. In addition, higher freight costs affected the company’s gross margin. Brexit also presented challenges, with increased duties and delivery issues increasing costs. The company faced difficulties servicing its EU stores and online customers due to Brexit-related friction. Furthermore, the relocation of its primary UK distribution center added to the costs, although it is anticipated to bring long-term benefits in terms of capacity and automation.

Despite these obstacles, Mountain Warehouse made headway towards its strategic goals and positioned itself for future expansion. The company concentrated on accelerating online growth by expanding its product range and acquiring the Animal brand. It also pursued general investment opportunities. Additionally, it continued its transition to larger store concepts, opening or relocating 10 stores during the year. This approach, combined with cost reduction and increased lease flexibility, allowed the company to offer a broader range of products to its customers.

Looking forward, Mountain Warehouse is confident that its strategy will enable it to regain profitability in the 2023 financial year. The company aims to expand its product range for online customers and launch a marketplace on its website, allowing third-party sellers to generate sales, with the company earning a commission on these transactions. Overall, Mountain Warehouse remains positive about its future prospects and is dedicated to meeting the evolving needs of its customers in the outdoor clothing market.

Useful links:
Mountain Warehouse Official Website
Animal Official Website