Monsoon Accessorize parent company Adena Brands swings to red as demand slumps

Adena Brands reported a pre-tax loss of £7.5m for the year to August 31, 2024, compared to profit of £14.1m in 2023.

Turnover at the group also fell from £231m last year to £204m, while EBITDA fell to £2.2m.

Adena Brands blamed “weak consumer demand” and “steep wage and other cost inflation” for the losses, as well as a “challenging environment”.

The group added that it was also due to “underperformance in several areas and the results reflect both that underperformance and the investment made to turn the performance around”.

With an eye to the core UK Accessorize business and Monsoon’s womenswear arm, which accounts for 70% of its total sales, the group said it “performed well” despite the environment it was trading in.

During the year the group opened 14 stores across the UK and refitted eight of its stores, bringing its total store portfolio to 141 as well as seven concessions as of August 2024.

Monsoon’s parent company paid a dividend of £2m during the period to its parent entity, understood to be owner Peter Simon, according to the latest filing on Companies House.

Adena Brands, which also owns womenswear brand East, said it had been focusing on underperforming areas in its store portfolio, childrenswear business and key markets including Saudi Arabia, Italy and Germany.

The group hailed “positive results” from the investments it made last year despite “continued weak consumer spending and a new round of wage-cost increases”.

Adena Brands said it has since returned to sales growth, profitability and a “much better performance”.

In terms of outlook, the group said it has benefited from “positive trading during the crucial peak months in the UK” from Black Friday through Christmas as well as during Ramadan for the Middle East business.

Adena Brands said it remains “confident” of its position in the market for the full fiscal year despite “uncertain retail sales and significant cost pressures” that remain.

Monsoon Accessorize chief executive Nick Stowe, who has been leading a turnaround of the business following its collapse in 2020, said: “Last year was a tough year for us and for retail in general. But it’s a long game, and we pushed ahead with our plans and investment, and faced into the need to improve our performance in several areas.

“Our new Monsoon and Accessorize stores are performing much better, we’ve made our digital business much more profitable, and our international transitions have shifted good businesses from failing franchisees to a much stronger partner in Saudi and our own operation in Italy. We’ve started to utilize the core technology investments we’ve made to become more efficient and to launch new functionality to connect our stores and digital business, something we expect to pay off in the years ahead.

“Turnarounds are rarely linear or straightforward, but we’ve navigated a difficult year back into growth and solid profitability, and we’re confident in the momentum we’re building for the years ahead.”

Founder and chair Peter Simon added: “In the face of a challenging trading backdrop and ongoing inflationary pressures, we took the necessary steps to realign and strengthen our business.

“Due to the actions taken and investments made, we are encouraged by current trading performance and optimistic about the opportunities ahead of us. We remain committed to our strategy and are continuing to invest in our product, distribution channels, and technology so that we are in an even better position to capitalise on the new fiscal year’s momentum.”