Theo Paphitis Retail Group; Christmas & Financial Year End 2015 Trading Statement
Positive like for like sales and margin growth delivered by the Theo Paphitis Retail Group for Christmas 2015 trading period, being 6 weeks to 24 December.
– Boux Avenue currently with 28 stores in the UK, saw like for like increase in sales of 8.3%, building on 31.7% last year, as well as increased gross margin.
– Ryman which has 220 stores nationwide registered a like for like increase in sales of 0.7% with increased gross margin.
– Robert Dyas with 95 stores mainly in the south, saw sales decline by 2.5% following strong growth over the last three years. However, gross margins increased.
Theo Paphitis commented:
“Despite the widely reported decline in footfall and challenging trading conditions in retail during November and December, I am delighted that our Group was able to deliver positive like for like sales in Boux Avenue and Ryman and improved gross margins for all three of our brands. Across our Group businesses, we decided to focus on the factors that we could influence being conversion of visitors into spending customers and maximising the amount they spent with us in store and online.
The development of Black Friday in UK retailing this year was predominantly an online event and had a further effect of disrupting the consumer’s purchasing habits which took time to recover. Adding this to the difficult trading conditions, coupled with unseasonal weather, retailers were competing hard for consumer spend with discounting appearing to feature prominently throughout the seasonal trading period. Having planned our promotions and offers, we decided to resist discounting further to protect margin and this resulted in increases in our margins across the board. This supports our belief that by delivering good product and customer service, together with convenience, customers will engage with our brands. Boux Avenue, in particular and experiencing its 5th Christmas, was able to build on a very strong performance last year in both sales and margin. Our trading in sale has also been positive in terms of both sales and margin on last year.
A great deal of focus and investment has been made, particularly over the last 18 months and will continue to be made in developing our businesses to meet the changing demands of our customers and the way they wish to shop with us. A new distribution centre was commissioned at Hemel Hempstead that became operational in May 2015, which included bringing in-house a third party warehouse and distribution centre that was in place when we acquired Robert Dyas. This also included the implementation of modern systems to provide a platform for Robert Dyas to grow from current regional gross sales of around £150m to over £250m nationwide. The facility now also supports our other Group companies and it will further allow us to meet the growing demand for Click and Collect across all our shops, irrespective of brand or where the purchase originated from. The restriction of the previous facilities, as well as the disruption to the business and Group in establishing and migrating to the new warehouse has had a short term impact this year, particularly for Robert Dyas. The warehouse is now fully operational with increased efficiency and capacity, placing us in a good position to deliver the ambitious plans we have for our three brands. This will involve increased investment in the next 12 months to further enhance our online proposition which will also include upgrading our tills, giving us seamless, true, real-time multi-channel multi-brand ability.”
Financial Statements Year ended 28 March 2015:
– Boux Avenue strong growth and improvement in financial performance for the year continued in line with business plan.
– Increases in EBITDA for Ryman and Robert Dyas for the year ended 28 March 2015.
– Significant investment made by the Group in last 18 months to continue work on delivering modern retail proposition for Robert Dyas, growth across all channels and international markets for Boux Avenue and new sales channels for Ryman.
– Like for like sales increased 0.6%. EBITDA increased by 6.1% to £10.4m from £9.8m in 2014.
– Turnover increased 0.3% to £131.0m from £130.6m with net assets of £44.6m from £41.4m in 2014.
Ryman has a nationwide network of 220 stores with over 120 years of retailing on the UK High Street. Development of the business will see us leverage our store network to continue building our B2C e-commerce business, as well as developing our B2B proposition further, engaging with entrepreneurial activity in the communities we operate in.
Boux Avenue Limited
The year ended 28 March 2015 represents Boux Avenue’s fourth year of trading, growing to a total of 25 stores (now 28 stores including Oxford Street) in the UK and 10 overseas.
Total UK sales increased by 35.5% from £27m to £36.5m, assisted by strong like for like sales of 18.9%; this building further on total growth of 48.5% and like for like growth of 27.2% in 2014. Gross profit margins also increased by 2.7% in the year.
Business continues on plan, with EBITDA loss reduced to £2.9m from £4.4m in 2014.
Continued like for like growth for the remainder of the current year including new stores opened, is expected to see sales at around £45m with further growth in margins and improvement in EBITDA.
The Group will continue to develop the Boux Avenue brand with investment in all areas of the business including enhancement of our proposition, both online and in store. Strong growth rates seen in sales and gross profit margins confirm the brand’s development and this has continued into the current year. Our overseas partners continue to invest in the brand in their respective territories and negotiations are continuing for new territories.
– Turnover up 1.0% from £124.2m in 2014 to £125.5m, with like for like sales of 1.0%.
– Underlying EBITDA increased by 12% from £6.25m in 2014 to £7m. Net assets up to £14.2m.
– £3.6m exceptional costs incurred relating to establishment of new warehouse in Hemel Hempstead.
Robert Dyas was acquired by the Group in July 2012. The business has seen turnover increase from £105.9m in the year to March 2012 to £125.5m in 2015; with underlying EBITDA increasing from £2.8m to £7.0m.
The growth of Robert Dyas since acquisition fully stretched the infrastructure of the business. A considerable amount of investment has been made by the Group over the last 18 months to improve this, which has included a major investment in a new warehouse facility in Hemel Hempstead. The transfer of operations from an external third party operator and the building of a new team, as well as the implementation of new systems to modernise operations has inevitably resulted in disruption to the business and Group, including utilisation of management resource and stock management across all channels. This has affected trading in the current year. The facility is now fully operational and settled and is capable of supporting growth to £250m for Robert Dyas as well as other Group companies.
Further investment is to be made in the next 18 months, enhancing our operations further, to include new ‘tills’, providing our customers with a modern proposition to complement a brand that has a heritage of over 140 years.