Fatface faces financial challenges post-acquisition by Next, a FTSE 100 company.
- The retailer reported a pre-tax loss of £3.2m over a shortened financial period.
- Acquisition-related costs significantly affected Fatface’s profitability.
- Revenue generated in the UK stands at £172.5m, marking a decline.
- CEO Will Crumbie remains optimistic about Fatface’s future under Next’s ownership.
Fatface, following its acquisition by FTSE 100 heavyweight Next, has reported a significant financial downturn, entering the red for the first time since the takeover on 27 January, 2024. The acquisition was sealed for £115.2m in October 2023. This transaction aligned Fatface’s financial period with that of its new owner, which lasted for 35 weeks, ending on the aforementioned date.
Within this period, Fatface incurred a pre-tax loss of £3.2m. While the company achieved a trading pre-tax profit of £4.6m, exceptional costs totaling £7.9m were incurred due to the acquisition and integration with Next’s systems, as confirmed by the recent filings at Companies House.
Revenue for Fatface during this period reached £191.5m, with UK sales contributing £172.5m. However, this marks a decline from the previous full financial year where overall revenue hit £281.3m, and included UK sales of £257.6m. Additionally, the company saw its US sales fall to £14m, a decline from £19.2m in the prior year, while revenue from the Republic of Ireland remained stable at £4.6m, and Canadian sales increased slightly to £1.3m from £150,000.
On the employment front, Fatface employed an average of 2,721 people during the 35-week period, showing an increase from 2,490 from the previous year. This rise in employment reflects the company’s efforts to bolster its operational capabilities amidst the integration process.
Despite these challenges, Fatface CEO Will Crumbie expressed optimism about the brand’s prospects. He acknowledged the challenging external environment but praised the company’s focus on full-price sales, margin improvements, and product resonance with customers. Crumbie highlighted the acquisition by Next as a pivotal step in Fatface’s journey, showing confidence in leveraging Next’s vast scale and expertise to expand Fatface’s market reach.
Fatface’s acquisition by Next poses challenges but offers potential for future growth under new ownership.
