Times are tough for Hackett as sales plunge
The year to the end of March was a tough one for luxury menswear brand Hackett as turnover fell 39.2% to £59.5 million as a result of the pandemic. Bespoke tailoring and RTW formalwear were off the agenda for many consumers.
It meant that the EBITDA loss widened by as much as 119% to £8.5 million from the £3.9 million loss of a year before. However the net loss — while even bigger than that EBITDA deficit — shrank a little to £20.58 million from £22.23 million.
The company said that during the year, the retail business was affected "drastically" by the different lockdowns that had been in place in the UK. In fact, full-price stores suffered a reduction in sales of 82.3% during the year while its outlets saw a smaller but still huge reduction of 73.7%. To put that into context, in the previous year, full-price stores had seen sales falling 9% while outlets rose 2%. That year had only seen the full impact of the pandemic during the final month of the period .
The company ended the latest year with 13 own stores in the UK, and 6 outlets. This was a reduction on the previous year as it had also had one concession back then. But the fact that it managed to get through the period and maintained virtually its entire retail estate, could be seen as encouraging.
Most encouraging, however, was the fact that the company's e-commerce sales after returns increased by as much as 85.2% during the latest year. This followed a 6% rise in the previous 12 months. Sessions rose by 30% and conversion improved by 56% due to site improvements.
The company said it managed to reduce its outgoings by 37% in the period. As well as being a direct response to the pandemic, this was part of a transformation plan that it launched in the 2019/20 financial year and which it accelerated last year. That transformation plan is focused on making the company more efficient and profitable, optimising traditional channels such as wholesale, franchise and physical retail, as well as improving its digital processes and sales.
Of course, risks remain to the business given the ongoing pandemic, but it said that its parent company — Pepe Jeans SL — is committed to supporting it.
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