Gear4music says that after a “tranformational year” it now has the infrastructure in place that it needs in order to pass the £100m turnover milestone.
The musical instrument and equipment specialist, a Top250 retailer in IRUK Top500 research, today said revenue of £80.1m in the year to February 28 2018 was 43% up on the previous year, including a 27% lift in UK sales and a 69% rise in international sales. It says there’s plenty of rom for potential growth since it currently has 6% of the UK market and 1% of the European market. But pre-tax profits of £1.5m were 43% down on the £2.6m reported last time following investment in the customer proposition.
Chief executive Andrew Wass said: “This has been a transformational year of investment for Gear4music. During the year we raised an additional £4.2m of growth capital, our European distribution centres became fully operational and we moved into a new head office. We accelerated investment in our employees, systems, marketing and customer proposition to firmly establish ourselves as one of Europe’s leading online retailers of musical instruments and music equipment.”
As a result, he said, the York-based company was moving into the new financial year with a market-leading ecommerce platform, infrastructure and customer proposition. He said trading in the current year was in line with expectations.
Here’s what the business said about its multichannel strategy.
The business prepared itself for increased sales by boosting capacity for an anticipated rise in demand over the next two years. It is moving its Swedish distribution centre in order to increase capacity fourfold after a year in which its Scandinavian business grew by more than 100%. At the same time, it is upgrading its distribution centre in York with new storage and handling equipment in order to boost its operational lifespan over the next 10 years. Costs for both are expected to will come in at £1.4m, enabling it to boost its revenue to about £150m.
By the end of the year, Gear4music listed 44,700 products, up by 21% over the year, and it expects to increase this significantly. Own brand sales grew by 45% during the year.
Customer numbers increased to more than 474,000 over the year, with repeat customer numbers up by 30%. It had a 9.5 Trustpilot rating in more than 37,000 reviews, something that the business said reflected its “customer first approach”. It added: “We are constantly refining the platform and we will continue to learn from our customers and use our significant technical resource to design the new solutions required to satisfy an evolving market.” Over the year it made 242 website updates and 286 system upgrades. Highlights included launching a US$ website and improving its mobile checkout, while ensuring GDPR compliance.
The company said its overseas growth strategy was built around localising websites and customer experience. Over the year it has expanded its multilingual customer service team, worked to improve local delivery and payment options, and invested more into translation and marketing. Its German showroom opened in March, enabling it to showcase its products and build its brands, as well as enabling it to buy in euros from German distributors.