May 19, 2023
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Tory Burch UK sees higher sales but profit skewed by prior year impairment charge

May 19, 2023

The year to January 2022 was a better one than the prior 12 months for Tory Burch’s UK arm, as the company bounced back from the full impact of the pandemic, even though Covid’s effects would still have been felt for much of the period.

At least, it was a better one on the sales front, because headline profit declined, although that was linked to accounting issues rather than a worse performance.

Turnover rose to £14.3 million from £10 million while gross profit rose to £9.2 million from £5.7 million. However, operating profit fell to £738,707 from £3.7 million while pre-tax profit dropped to £994,384 from £3.9 million. Net profit was down to £736,995 from £3.8 million.

The American brand has three full-price stores in the UK and one outlet store, as well as one of each in Germany, which also comes under the UK business’s remit.

It said the wide discrepancy in the profit figures for the latest year and the previous period came after it performed an impairment assessment over the assets associated with the UK stores during 2020 as a result of the pandemic.

An impairment charge of £4.68 million was recognised but the during the current year, management reassessed this and concluded that market support payments from its principal company should be allocated to individual cash-generating units. This meant it reversed the impairment charge recorded in 2020. 

Unfortunately, it offered no commentary on how the year progressed nor how it has done since then.

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