Seraphine says it has been hit by supply chain issues, with stock arriving by sea from China delayed in July and August. Stock holdings were lower than planned from late July onwards, and the retailer could not “fully satisfy” customer demand. The maternity wear retailer, ranked Top350 in RXUK Top500 research, now expects that first half sales will be higher than last year – but that profits could be 15% lower.
Seraphine, which floated on the stockmarket this summer, says in a trading statement today that sales were above expectations in the first quarter of its financial year, to July 4 – especially in higher priced categories – but that trading was “more challenging” than expected in the second quarter of the year. Supply chain issues meant a “loss of momentum” at the end of the summer, and the retailer won fewer customers at the point when they started to buy maternity clothes.
Sales via digital partners including Zalando performed well, but, says Seraphine “the physical retail environment remains challenging for the group’s eight retail stores”.
First half revenues are now expected to be 30% ahead of last year, while adjusted earnings before interest, tax and one-off costs are on track to come in at about £2.5m – 15% down on last year.
The team is now focused on rebuilding momentum by shifting its marketing spend to “demand creation channels” and by building more time into its design and supply chain process. It is to launch a dedicated ecommerce site for the Netherlands in coming weeks, and will expand its Zalando tie-up into more Northern European markets.
Seraphine chief executive David N Williams says: “After a strong Q1 exceeding expectations with group revenue growth of over 50%, it is extremely disappointing to have to report a weaker Q2 performance due to the significant impact of logistical headwinds and the subsequent momentum loss. I believe the actions we are taking are the right ones to ensure an improved second half performance and I remain fully confident in the future prospects for Seraphine.”
Seraphine was founded in 2002 and now sells through eight shops and online to more than 120 markets, especially Europe, North America and the UK.