Following its acquisition by Next, fashion retailer Fatface has entered a financially challenging phase.
- Fatface has reported a pre-tax loss of £3.2m in the 35-week period ending January 2024.
- The company faced exceptional costs totalling £7.9m, mainly due to its integration with Next.
- Despite these challenges, Fatface’s revenue reached £191.5m during the period.
- CEO Will Crumbie remains optimistic, highlighting the brand’s strong customer connection.
In the aftermath of its acquisition by the FTSE 100 company Next, Hampshire-based fashion retailer Fatface has encountered significant financial hurdles. During the shortened 35-week financial period ending January 27, 2024, Fatface reported a pre-tax loss of £3.2 million. This financial restructuring aims to bring its fiscal calendar in line with that of its new owner, Next, who acquired Fatface for £115.2 million in October 2023.
The company’s financial challenges were primarily influenced by exceptional costs amounting to £7.9 million. These costs are largely attributed to the integration of Fatface into Next’s operational systems, highlighting the complexities and financial demands associated with post-acquisition transitions. Despite the reported losses, Fatface managed to achieve a trading profit of £4.6 million before exceptional items, indicating that its core business operations remain fundamentally strong.
Revenue figures for this period reveal that Fatface generated £191.5 million, with £121.4 million sourced from its brick-and-mortar stores and £71 million from digital sales. Within the UK, sales amounted to £172.5 million, while US revenue was recorded at £14 million. The company’s financial performance in the Republic of Ireland and Canada stood at £4.6 million and £1.3 million, respectively. These figures are contrasted by a more robust performance in the previous full fiscal year, where the company’s total revenue was £281.3 million, and it achieved a pre-tax profit of £19.5 million.
CEO Will Crumbie expressed confidence in Fatface’s potential to withstand and adapt to these challenges. According to Crumbie, the focus on full-price sales has led to improved margins and underlying profitability, signalling the brand’s resilience in a challenging market. Crumbie also emphasised the enduring appeal of Fatface’s products and the favourable reception by an expanding customer base. He stated, “Our stores continue to be fantastic places to visit and shop, and our digital presence remains a key part of our offer.”
Moreover, under the new ownership, Fatface aims to leverage Next’s scale and expertise, viewing this as an opportunity to extend its market reach. Crumbie acknowledges the dedication of colleagues in building Fatface’s esteemed heritage and quality, which he believes positions the brand for future growth. “This is an exciting time at Fatface as we look to leverage our new ownership with Next, harnessing the scale and expertise of this market-leading retailer, enabling our brand and our products to reach even more customers,” he affirmed.
The acquisition by Next presents both challenges and opportunities for Fatface, as it navigates a complex integration process while striving for growth.
