Phase Eight has posted record annual results driven by its international growth as it plans to become a global business.
Phase Eight has posted record results driven by international growth as it plans to become a global business.
Accounts for Phase Eight holding company Poppy Holdco showed the fashion retailer generated EBITDA up 16% to £24m in the year to February 1, while sales surged 15% to £140.7m.
International sales now comprise 11.5% of turnover, up from 3.7% the prior year.
At year-end Phase Eight had a cash balance of £15.5m, up from £10.8m the prior year.
Online sales surged 24% and now represent more than 16% of the group total.
The retailer opened 10 stores and 49 concessions, driven by the expansion of its overseas business – it opened 53 of the shops and concessions abroad. Phase Eight now trades from 407 stores and concessions in the UK and overseas.
Chief executive Ben Barnett told Retail Week: “Worldwide the opportunity is huge.”
Phase Eight, which is owned by private equity firm Towerbrook, has been on an international expansion push since it opened its first overseas locations in 2012. It now has 98 international stores and concessions in Australia, Belgium, Germany, Singapore, Switzerland, Sweden and the Middle East.
“We’re expanding in the Far East where the London connection is very valued so we plan to take Phase Eight London fascias into new markets there,” said Barnett, who was appointed Phase Eight’s first chief executive in more than five years in March.
He said Phase Eight’s product is key to its success internationally, which he attributed to work led by managing director Lee Harlow and brand director Judith Bremner.
Barnett said an emphasis on dresses, particularly through its Collection 8 label, offers differentiation in fashion markets dominated by trousers. About 45% of its sales were generated from dresses.
Harlow said: “No-one has the same breadth of offer as us and this is the same internationally.”
Barnett said the first four months of the current year have been “very good” with a year-on-year increase in sales and margins. And there is more overseas growth to come.
“There is a long list of countries we are looking at but we need to prioritise them,” he said.
Phase Eight’s international growth strategy has been to open three to five concessions through a department store operator to benefit from the footfall then follow up with standalone stores.
Barnett said Phase Eight is eyeing the Americas for further growth and he has visited the US in recent weeks to scope out potential department store partners. He added that the brand is gaining traction, securing meetings with people it wouldn’t have been able to a few years ago.
“It really helps for department store managers to see us in places like Dubai, Sydney and Zurich,” he said.
The retailer is also targeting Russia following the success of Monsoon Accessorize there. Barnett said that China “will happen” but Phase Eight is not actively looking for sites there at the moment.
Barnett explained: “We would like to open at least 300 new stores and concessions [overall] in the next three to five years. In the UK we would like to open around six to 10 each year in the next three to five years.”