for the year to the end of March 2020 and they show just how tough the climate was becoming even pre-pandemic.

But they also contain a prediction that the company is on the verge of becoming profitable following its CVA and its pivot to being a mainly online operation.

The company said sales revenue fell almost 4% in the financial year, dropping to £33.6 million. And the gross margin percentage dropped significantly to 40.5% from 54.1%. This meant that adjusted EBITDA was a loss of £4.1 million. The net loss was £12.5 million, much bigger than the prior year’s £5.9 million.

The decline in sales was due to the closure of loss-making stores, but the online business – which is the future direction of the brand – was up year-on-year. And the plunge in the gross margin was due to the impact of all the stock write-offs, along with some other issues.

And of course, the impact of the pandemic as its financial year ended can’t be ignored. It said that Covid affected sales from February onwards and B2B orders/shipments were largely cancelled or postponed.

However, its e-commerce channel remained operational and continued to perform strongly.

In light of what happened last year, the firm used the opportunity to review its business model and refocus its UK operation to become a primarily online and e-commerce business. It said the online channel is a higher-margin one and losing the overheads and complexity of running a nationwide store portfolio will help its bottom line. That view is also supported by predictions that 25% of high-level fashion will be sold through e-commerce by 2025.

In order to push its changes through, it launched a CVA as it was the only way it could exit retail stores and leases which would have become loss-making. It completed the CVA process last year with all stores and concessions now closed except for London Regent Street, Royal exchange, Harrods and Selfridges. Its flagship and profitable stores are all now based on turnover rents.

Meanwhile the B2B channel now consists of just two franchise partners in China, one in the Middle East and its "very profitable" corporate business. The result of all this is that by this year, more than 81% of its business was online.

And this pivot seems to be paying off the company said it revenues in November and December 2020 saw a 42% increase year-on-year, despite the Covid crisis. 

And with over £8 million of costs cut out of the business, it’s forecasting £3.5 million in EBITDA in the financial year that has just ended. This is a fairly reliable prediction given that it’s based on 11 months of actual trading and just one month of forecast.

Management said the business in 2021 is at a turning point to becoming profitable and cash generative as an almost pureplay online operation.