FatFace reported a pre-tax loss of £3.2 million for the 35 weeks ending 27 January 2024, following its acquisition by Next.
- Next acquired 97% of Fulham Parent Ltd, the FatFace Group, for £115 million in October 2023.
- FatFace’s latest filing shows significant “exceptional costs” of £7.9 million primarily due to the acquisition.
- Revenue dropped to £191.6 million from £205.4 million compared to the same period in 2023.
- Despite these challenges, FatFace reported an increase in trading profit before tax to £19.5 million.
FatFace, the well-known British clothing retailer, has encountered a pre-tax loss of £3.2 million for the period of 35 weeks leading up to 27 January 2024. The company adjusted its reporting period to align with its new owner, Next, which completed the acquisition of a 97% stake in Fulham Parent Ltd, FatFace’s parent company, for a total of £115 million in October 2023.
The updated financial documents submitted to Companies House highlight substantial ‘exceptional costs’ amounting to £7.9 million. These costs were predominantly incurred in relation to the acquisition by Next, contributing to the observed pre-tax loss. Moreover, the company’s revenue witnessed a decline to £191.6 million, a reduction from £205.4 million observed in the same period the previous year.
Interestingly, amidst the financial setbacks, FatFace reported a rise in trading profit before tax, which increased to £19.5 million from £18.8 million in 2023. This improvement has been attributed to the company’s strategic emphasis on enhancing profit margins over the aggressive pursuit of sales growth, prioritising full-price sales which resonated well with its expanding customer base.
CEO Will Crumbie expressed confidence in the company’s performance, stating that despite the challenging external economic conditions, FatFace delivered a robust performance over the specified period. Crumbie further highlighted that focusing on full-price sales had notably improved both the margin and profit before tax, supported by the enduring appeal of the brand’s ‘beautiful products’.
Furthermore, FatFace’s retail outlets remain popular destinations for consumers, and its digital presence continues to play an integral role in its market strategy. Both physical and online platforms contribute significantly to the brand’s ability to retain and attract customers, thereby strengthening its market position even amidst acquisition-related adjustments.
FatFace’s financial performance reflects strategic adjustments following its sale to Next, amidst acquisition-related financial challenges.
