Reiss booms as product and strategy changes score with UK and US shoppers
Mid-market fashion retailer Reiss benefited from fewer markdowns, operational improvements, upgraded product and the publicity generated by the Duchess of Cambridge’s fondness for the brand to post improved results for last year.
And importantly, it said that early SS19 sales “have maintained the positive momentum that built towards the end of last year, reflecting our drive to unlock the brand’s potential.”
The company reported double-digit sales growth on a like-for-like basis with an increase of 13.2% in the year to the beginning of February. Its total sales rose a healthy 8.3% to reach £186.3 million. Given that the previous year included 53 weeks, the increase would have been 10.1% on a 52-week comparable basis. And its earnings (before interest, tax, depreciation and amortisation) rose as much as 21.3% to £19.3 million.
In the first 10 weeks of the new financial year, group sales have risen 27.9% with UK like-for-likes up 27.6% and international (which remains a relatively small part of the business for now) even stronger with a 38.6% increase.
The company has transformed itself in the past two years since chief executive Christos Angelides joined, with a focus on product improvements, technology upgrades, and better customer service and it has seen success even as higher-priced brands with similar profiles (such as LK Bennett) have struggled.
Last year Reiss succeeded in selling more merchandise at full price and also focused on expanding abroad in strategic markets. It launched online sales in the US in a deal with upscale department store chain Nordstrom.
But it's also heavily focused on its physical shops of which it has around 119 globally at present. It's planning to open 40 new points of sale this year and is also set to launch new footwear and accessories collections.
Angelides said: “The initiatives we put in place to refresh the brand and product offer, both in-store and online, have resonated well with our customers resulting in healthy sales and EBITDA growth for 2018. Last year, we continued a programme of investment across all areas of the business, that specifically focused on upgrading the design and quality of the Reiss product offer. This, coupled with operational improvements, has delivered a step change in performance.”
This will be good news for Warburg Pincus, the private equity firm that bought control of the brand from founder David Reiss three years ago, with rumours that it’s looking to make a profit from its investment and sell the brand.
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