Brand Architekts reports a 15% sales decline as it shifts strategy towards fewer core brands.
- The company cites discontinuation of unprofitable lines and external economic factors as reasons for the decline.
- Despite overall sales drop, flagship products exhibit strong performance with significant growth in specific sectors.
- Legal costs and acquisitions affect financial positioning, with a reduction in net cash by £1.2m.
- CEO affirms strategic focus on brand consolidation and international expansion to enhance future profitability.
Brand Architekts, the owner of popular beauty brands such as Skinny Tan and Super Facialist, has announced a strategic shift towards concentrating on fewer, larger brands, resulting in a 15% decline in sales for the fiscal year ending 30 June. The firm’s commitment to ‘fewer, bigger brands’ reflects an effort to streamline operations and focus on its most promising lines.
The decline in sales, amounting to £17m as opposed to £20.1m in the previous year, has been attributed to the phasing out of underperforming brands and the ongoing impact of the cost-of-living crisis. Additionally, an unusually wet spring season further compounded the sales slump, reducing consumer demand.
Notably, however, flagship products have bucked the trend by showing strong growth. The Facialist skincare line and menopause product The Solution have seen sales increase by 17% and 43% respectively, illustrating the potential of well-positioned items in competitive markets. Moreover, Skinny Tan’s Body Glow has emerged as a fast-growing player in the tanning industry after launches in major retail chains such as Boots and Tesco.
Financially, the company has faced challenges including a reduction in net cash, which fell from £8.2m to £7m. This was primarily due to the acquisition of MR Haircare and related legal expenses, specifically a £200,000 settlement and £225,000 in legal fees over a shareholder agreement dispute regarding the Fish grooming brand acquisition.
Chief Executive Quentin Higham has emphasized the strides made in refining the company’s portfolio and improving profit margins, which rose by 1.5% to 41.2%. Higham remarked on the group’s goals to increase brand visibility and consumer engagement through strategic campaigns and new product development, alongside plans for international market entry. These initiatives are part of a broader strategy to stabilize the financial situation and achieve sustainable growth targets.
Brand Architekts’ strategic realignment positions it towards long-term success and profitability in a dynamic market.
