Missguided reports 'good progress' after annus horribilis

Online fashion retailer Missguided has reported a fall in sales during the year to 31 March 2019, but said “good progress” has been made in returning the company to profitability after its annus horribilis in 2017-18 when losses spiralled.

In documents filed on Companies House, the retailer said EBITDA before exceptional items was £3.5 million compared to a loss of £26.3 million one year before.

This was achieved despite a decline in revenue from £216 million last year to £187 million in the latest reported period.

Missguided said that the decline in revenue was due to a planned reduction in marketing spend – a decision made to help boost the bottom line that had been so diminished one year before. The lack of marketing meant brand awareness was reduced, while the business also focused on shifting aged stock which was the reason given for its poor performance in 2017-18.

There are already signs that marketing will ramp up again in the near future, with the company recently announcing a new partnership with search engine optimisation agency, Rise at Seven.

Last year Missguided said it would be entering a transitional period – and that is what played out in the 12 months to March 2019. It said it was pleased about new inventory management controls in place within the business, and added “significant groundwork has been laid” to put the company back on the journey to growth.

Missguided also acknowledged last year how it was unable run stores profitably, and that resulted in the closure of its giant Westfield Stratford City shop during the most recent trading period. It is still operating its Bluewater store but it has negotiated an exit on a more favourable short-term lease in the build-up to its imminent departure from the Kent shopping centre.

The retailer said it has written of an inter-company loan of £16.85 million because of its departure from store leases.

Missguided’s wholesale business provided some positive news for the group balance sheet, with like-for-like sales across all of its wholesale accounts growing year on year.

Loss after tax for the group in 2017-18 totalled £46.7 million, but that was reduced to £4.7 million for the 2018-19 period.

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