Ann Summers’ full-year profits more than doubled as boss Jacqueline Gold prepares to begin the “painful” process of weaning the retailer off discounting.
The lingerie and sex toy retailer has recorded a 180% jump in its pre-tax profits year on year to £2.9m in the 52 weeks to June 24, driven by an 8% increase in sales to £134m.
The retailer’s like-for-like sales increased 6.2% during the period as its ongoing store refurbishment programme bore fruit.
The retailer’s new concept stores performed 20% over the rest of the Ann Summers 130-strong bricks-and-mortar estate in their first year of opening.
The sex toy retailer’s party planning division, which was the subject of ITV drama Brief Encounters last year, recorded a 15.9% sales jump during the period, buoyed by increased employee retention and training.
Ann Summers’ online sales increased 7.4%, while its rapidly growing wholesale division recorded its biggest year to date as sales skyrocketed 94.6%.
Gold told Retail Week: “Wholesale drove 50% of the growth last year as there is a huge appetite for our product.
“The Ann Summers concept still remains unique globally so we believe the international opportunity for us as a business is huge, through licensing, joint ventures, standalone stores, all of which is part of our strategy for the future.”
The retailer also saw a net increase of one million more shoppers through its doors during the year, despite closing a net of four stores.
“Retail is having a really tough time; declining demand, legislative burdens and the Brexit effect is hitting everyone,” said Gold.
“However, as a business, we have been through challenging times before, we know we have to stay focused on what we do really well; continue to innovate, continue to put our customers first and hold our nerve until the economy comes out the other side.
“Part of that will be a transition period where we move ourselves away from discounting; this will no doubt be painful, but we know this is the right decision for our brand.”
Gold added that consumer uncertainty was likely to continue throughout 2018.
“We have to face the reality that we might not have hit the bottom of the spend squeeze and sales growth decline, yet,” she said.
“We have always run a tight ship but it is now more important than ever to remain agile, resilient and focused on our long-term strategy.
“We have had great success with our product innovation and are therefore leveraging our core strength in this area to bring the customer new and different product and expand our range of brands.”