Warpaint takes coronavirus hit, cuts costs, working towards Christmas season
It said that prior to the recent lockdowns, its current year trading to the end of February 2020 “was at the upper end of the board's expectations”.
However, since the firm’s last trading update announced on March 19, there has, “as anticipated, been a substantial reduction in sales as a result of the lockdowns causing the closure of many of the group's customer's retail outlets in the UK and its other markets”.
This means “most customers are currently reducing, deferring or cancelling orders of all-year-round cosmetics”. But the company continues to sell online and through those stores stocking its products that remain open.
To deal with this hit to its revenues, it has launched a number of “significant” cost-cutting measures, which include reducing non-essential spend, furloughing 84 of its 115 UK staff while maintaining their salaries via the UK Government's Coronavirus Job Retention Scheme, landlords agreeing to defer rental payments, and the suspension of all marketing, travel and other discretionary expenditure.
Staff who haven't been furloughed are mainly working on its 2020 Christmas order book, “which continues to build”.
It also said that at April 8, the company had cash of £3.3 million and hire purchase and term debt of approximately £500,000.
CEO Sam Bazini said: "The wellbeing and health of our employees is of paramount importance and we are doing everything possible to support them and to ensure that they are well protected in these difficult times. The current situation is challenging, but I am confident that Warpaint with its differentiated product offering, strong balance sheet and ability to react quickly to changes in circumstances is well positioned to withstand the Covid-19 pandemic."
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