AllSaints US strong pre-Covid, looks to rebound, but footfall is 'suppressed'
AllSaints USA has filed its results for the 12 months to February 1 2020 with turnover rising to $155.8 million from $143.5 million in the previous financial year.
It also reported operating profit of $9.5 million, up from $2.3 million, and EBITDA of $36 million, up from $10.6 million in the previous period. But it made a net loss of $10.2 million, wider than the $273,000 of a year earlier.
The company, which is registered in Britain, operates the AllSaints fashion brand in North America. It’s owned by the AllSaints UK parent.
It said that its turnover increase was driven by a combination of like-for-like sales growth and new business, while the profit result was due to "the operating arrangements that the company has in place with its immediate parent company All Saints Retail Limited”.
It gave no further detail on the performance during that period but it did offer a 2020 update saying that the Covid-19 pandemic has hurt its operations, a statement that comes as no surprise considering it entered into a company voluntary arrangement for its US stores last summer.
The company said that it “began 2020 with strong momentum and a clear strategy, but has had to abandon its original objective as it seeks to tackle this challenge head-on. Its priority remains to ensure the safety and well-being of its customers and staff, whilst evolving its operating model, so it is well placed to rebound in 2021 and resume growth”.
It was forced to temporarily close all of its stores in the US and Canada in the second half of March 2020 in line with government restrictions, and while they opened again in June, they still remain subject to local state lockdowns and restrictions.
As a result of this, the management team has focused heavily on digital in the current financial year, “prioritising inbound inventory flow, distribution centre operations and online stock availability”. It said the business has "shown resilience and the ability to adapt". And both its online sales and its customer base have continued to grow versus the prior year in the first half of this financial year.
But even with its digital growth, the closure of physical shops has been a burden and the company has taken action to preserve cash and liquidity while "attempting to preserve as many jobs as possible". It halted discretionary spend and capital expenditure, and the senior leadership team gave up part of their salaries.
It has also taken advantage of government support and has been talking regularly to its lenders.But the prolonged lockdown still “placed a significant strain on its liquidity position” during the summer, hence the CVA move for its North American stores.
This helped it to remove rent liability that had accrued during lockdown and align future rents to sales performance, with the company’s creditors having voted in favour of the CVA.
The firm believes it now has an improved operating model to withstand the continuing impact of Covid-19.
But that doesn't mean it's a business-as-usual outlook for the retailer with it saying in its results filing that while the majority of its doors have reopened, "there remains considerable uncertainty around the long-term effects of Covid-19 on consumer behaviour". And it expects football to remain "suppressed" for some time.
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