Feb 2, 2018
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Radley profit crimped as it invests in UK, US and China growth

Feb 2, 2018

UK handbag and luggage brand Radley saw a strong sales rise in its most recent financial year but its profit didn’t reflect the sales increase as the firm invested for growth.

China and the US are key for Radley as it grows globally

In a Companies House filing for the year to April 30 2017, it reported turnover up 9.2% to £73.3 million, boosted by e-tail, by concessions and by a 47.5% surge in growth internationally as its deal with Macy’s paid off. Thailand, Australia and international travel retail were all strong too.

International sales may still be relatively small in monetary terms (they reached £10.5 million during the year) but the brand’s growth potential is huge. It opened an additional 50 Macy’s concessions during the period and said these shop-in-shop units have performed “exceptionally” well. Many more concessions are also planned and other developments such as its Chinese Tmall deal will also help its global ambitions.

The company is investing heavy in its online ops too and global e-tail rose 13.4% to £11 million in the period while UK e-tail grew 7.3%.
But its UK retail stores have been less buoyant and turnover there rose only 0.2% during the year as a “solid performance” in its factory outlet stores was offset by softer trading in its high street locations. But its John Lewis concessions were strong.

As you can see though, there’s a major pipeline of future sales expansion being developed even if the firm spending heavily on such future growth opportunities means profits are being hurt for now. Its profit on an Ebitda basis dropped 39% to £3.4 million in the year, but CEO Justin Stead said the company has laid the groundwork for “exceptional” future growth.

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