• Karen Millen records full-year losses of £9.7m after operating profit of £1.9m in prior year
  • Sales “broadly flat” at £178m
  • Major refinancing completed with Kaupthing as debt “significantly reduced”

Karen Millen has fallen into the red in its full-year as it suffered “significant impairment charges” and sales were flat.

The struggling London-headquartered fashion retailer, which is currently without a chief executive, reported an operating loss of £9.7m in the year to the end of February 2015, after an operating profit of £1.9m the prior year. A pre-tax figure was not disclosed.

The retailer said the operating losses were “primarily driven by significant impairment charges for property and stock”, but did not give further detail. In its previous full-year pre-tax losses widened from £2.7m to £6.1m. 

Sales in the full-year were “broadly” flat year on year at £178m. Gross profits were also flat at £102m.

The company also said today a major refinancing was recently completed with its majority shareholder, Icelandic bank Kaupthing, under which the retailer’s debt has been “significantly reduced”.

Improved working capital loans have also been secured to “support the business strategy and capital investment plans”, it said.

The retailer saw its boss Mike Shearwood step down in September after plans for a management buy-out were abandoned. A new chief executive is expected to be announced soon.

Karen Millen also revealed a new strategy focusing on its digital offer with “significant investment in systems to develop a true omnichannel business”.

Chairman Neil McCausland branded it a “year of change”. He added: “We have a very clear strategy to reshape the business. We have completed a major refinancing to give us the resources to implement our plan.”