Lehman Brothers collapse takes toll on Reiss
Fashion retailer Reiss has reported “creditable” earnings last year, when it suffered like other retailers in the aftermath of Lehman Brothers’ demise.
Reiss generated EBITDA of £8.5m in the year to January 31, down from £11.9m the previous year, excluding the impact of US start-up costs. Sales advanced 21% to £81m during the year.
The retailer said that as the downturn hit in the second half of the year, trading was affected.
“As a result the market saw an unprecedented level of discounting by retailers in the run-up to Christmas,” Reiss reported. “To protect our brand position we limited our involvement, but we ensured we ended the year with clean stock. As a result, this negatively impacted our performance.”
Profits were also affected by infrastructure investment which began before trading conditions deteriorated.
However Reiss said: “Trading in 2009 has continued to improve and maintaining the investment in infrastructure, and its negative short-term impact on profit, will ultimately improve the potential of the brand and its long-term profitability.”
Last year Reiss opened a new head office and flagship store in shared premises. The retailer also created a “dedicated brand department” which it expects to strengthen its profile internationally.
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