Monsoon, Accessorize and East parent company Adena Brands says its turnaround strategy for the brands is progressing ahead of expectations. Digital transformation and store renewal is at the heart of the strategy, now in its third year. Online now accounts for 45% of UK sales while the retailer opened 19 new UK shops in its latest financial year and plans 22 more in the current one.
Adena Brands, which is chaired by Monsoon founder Peter Simon and bought the brands out of administration in 2020, today reports group sales of £258m in the year to August 31 2022. That’s 43% up on the previous year. In the UK, like-for-like retail sales were 105% up on the previous year, led by Accessorize and its travel business.
Adena Brands chairman and founder Peter Simon says: “We took a leap of faith in 2020 to rescue Monsoon and Accessorize at the height of the pandemic. Our team has worked incredibly hard since then, first to save the business, then to rebuild its profitability, and now to write a new chapter for our iconic brands. We worked through the challenges of the pandemic, then the challenges of the energy shock, and now we’re facing into the challenges of a recession. But the business is well-prepared after all the work we’ve done, and I want to thank our customers for their faith in us, all our colleagues for their enduring commitment and our landlords and suppliers for their continued support.”
Earnings before interest, interest, tax and one-off costs came in at £24.4m, including a Middle East joint venture. The business says it now operates from a lower cost base, while gross margins on products grew by 5.3 percentage points (pp). The group, including its Middle East joint venture, ended the year with £22m cash and no debt.
Online sales grew across the business, with Monsoon seeing web demand rise by 22% and 45% of UK sales taking place online. Adena says its financial results reflect the success of a turnaround strategy that is focused on product and brand renewal, digital transformation, retail portfolio renewal, international expansion and a continued central control of costs. Each, it says, has contributed ahead of expectations.
Nick Stowe, CEO of Adena Brands, says: “This past year we’ve made continued strong progress on our turnaround plan, moving from the earlier restructuring phase to a focus on growth. We’ve continued Monsoon’s digital transformation with a new website design, better digital marketing, and the development of ‘Monsoon Bazaar’, our marketplace for like-minded, sustainable third-party brands. We’ve also opened more of our boutique stores and have more planned in the year ahead. Accessorize has performed tremendously, its retail business returning to form with great growth from its travel locations in major airports, something we are building on with our European travel store expansion. And East, our smallest brand, is a gem, doubling in size with great opportunities ahead.
“We’re entering a clearly more challenging consumer environment as the economy slows, and we’re taking action to control our costs and capital spend. But the business now has a great foundation, we’ve performed well and grown in the first quarter of our new fiscal year, and we remain positive about the year ahead.”
Simon adds: “Above all, throughout the challenges of the past few years, Monsoon, Accessorize and East have stayed true to their founding principles: in the early 1970s, travelling through different cultures and countries, I fell in love with the beauty of handcrafted clothes and accessories, especially their creation in a non-industrial manner and in particular the colourful, vegetable-dyed, handloomed, handblock printed processes from Rajasthan. So today it is very rewarding that our brands continue making these beautiful clothes with our own unique designs and a continuing fundamental commitment to sustainability and ethical trading. Our business turns 50 next year, a testament to the enduring strength of our brands but also to how we have been able to evolve and change in a way that resonates with our customers today. We are going to celebrate with some wonderful new collaborations that draw on our heritage but also look ahead: I am looking forward to this next chapter with the same excitement as when I founded the business 50 years ago.”