Luxury leather goods and stationery retailer Smythson has reported a positive increase in sales for the year ending March 2022. The company saw a rise in turnover from £16.9 million to £20.6 million. However, despite the increase in sales, Smythson experienced a decrease in gross profit as a percentage, going from 59.9% to 59.5%. Additionally, the company reported an EBITDA loss of £7.3 million, in contrast to a profit of £3.1 million the previous year. Smythson had also experienced an EBITDA loss of £5.2 million the year before. Pre-tax and post-tax losses amounted to £8.5 million, compared to a profit of £1.9 million the previous year. Two years ago, the company recorded a net loss of £6.4 million.

These setbacks can be attributed to the ongoing challenges brought by the Covid-19 pandemic. Smythson’s UK stores were forced to remain closed during the initial trading period of the year. However, as the situation gradually improved and restrictions eased, there was a strong rebound in consumer confidence and a preference for physical shopping, which led to a robust performance in the latter part of the financial year.

To address these challenges, Smythson has outlined a plan to refine its retail network. This includes the closure of unprofitable stores in order to focus on enhancing brand visibility, expanding its digital channel, entering new markets, and investing in product development and marketing. As part of this strategy, the company closed its stores at Royal Exchange and Bicester in 2022.

Although there was a slowdown in e-commerce growth compared to the previous year, Smythson’s digital sales still saw a significant increase, surpassing 30% compared to pre-pandemic levels. Particularly in the strategically important US market, digital growth remained steady year on year. This growth was fueled by a 26% increase in conversion rates. Since April 2022, Smythson has also partnered with new creative and media buying agencies, resulting in an expansion in the US market and year-to-date growth of over 12%.

While Smythson did not provide a specific timeline for returning to profitability, the company’s directors expressed confidence in achieving sustainable sales growth in the long term. Furthermore, the ultimate parent company of Smythson has reaffirmed its commitment to providing financial support.

Useful links:
1. Smythson Official Website
2. Smythson – Wikipedia