Theo Paphitis Retail Group has posted an uplift in earnings at Ryman and Robert Dyas, but trading has been tough at Boux Avenue.
Sales at stationery business Ryman were up 1.4% to £129.9m in the financial year to March 30, 2019, when EBITDA advanced 6.5% to £8.2m as the launch of new categories, the development of services and customer engagement initiatives bore fruit.
Robert Dyas generated a rise in revenues of 6.3% to £131.8m and EBITDA increased from £0.5m to £1.6m as online grew and there was a good performance in outdoor summer categories.
However, Boux Avenue suffered as a result of performance from its shopping centre stores as the online fashion market burgeons. A strategic and operational review is under way as the lingerie specialist seeks lower rents.
Over the Christmas period comprising the six weeks to December 24, group like for likes slipped 1.3%. There was positive performance at Robert Dyas, Ryman was flat and Boux Avenue was down.
Online sales now account for 21.8% of the group total and almost 50% at Boux Avenue.
Paphitis said: “Looking back at the prior financial year and this Christmas, our group has delivered a resilient performance in what has been the most challenging retail environment we have ever experienced, underpinned by consumer uncertainty and declines in footfall.
“I am pleased that Ryman and Robert Dyas, as heritage brands on our high streets, have traded well over the prior financial year. Both businesses put in good performances.
“Boux’s online sales performance during the Christmas period tells its own story, accounting for almost 50% of total retail sales. As a greater proportion of fashion sales migrate online in the UK, it’s clear that the relevance of shopping centres to fashion retailing – and particularly Boux’s core demographic of 18 to 30-year-old females – is dramatically different from what it was when we launched the business in 2011.
“It is not a surprise, therefore, that trading has been most challenging in the majority of our 30 Boux Avenue shopping centre stores, which has contributed towards a double-digit decline in like-for-like sales in recent months.
“The significant costs of marketing your brand to customers in these locations no longer makes sense and one of the most significant factors we must address is the rents we are paying across our shopping centre destinations.
“Boux is still paying significantly above average market rents whilst competitors and co-occupiers have been able to completely realign their rental cost base, often through CVAs.
He continued: “This does not tally with the overall experience we have had with our other businesses located on the high street where we have made some progress in renegotiating rents back towards the market average following constructive discussions with a number of landlords.”
“We have seen progress with the turnaround plan we implemented at Boux last year and the reaction to our new designs and products has been encouraging. The contribution to Boux’s ranges from product designed by our in-house team, led by Zoe Price-Smith, is increasing and will be entirely influenced by them from the autumn this year.
“However, the lower than planned growth in Boux’s overall business, partially impacted by lower footfall experienced at these locations as well as an unsustainable cost base, has meant that we are accelerating a strategic and operational review of the business, leaving no stone unturned.
“We will look to address our cost base, in particular our rents, as well as addressing the appropriate mix of channels to match the changing needs of our customers. Given the significant importance of the review, this will be led by me personally, supported by our group board. The publication of Boux’s financial statements will follow pending the outcome of this review.
“As I have previously said, the lack of reform and focus on business rates by the Government and other authorities continues to frustrate us and puts at risk one of the key sectors for the UK economy.
“However, I am a firm believer that both physical and online retail have a future and we are seeing that we are able to deliver further growth through our heritage brands, Ryman and Robert Dyas, through our ecommerce and other new channels.”