In the Style today reports fast sales growth in a year in which it launched more social influencer collaborations – but, at the bottom line, a pre-tax loss as costs rose.
The social influencer-led brand, which bills itself as a fashion disruptor, launched 193 collaborations with 27 social influencers during the period. That included its biggest ever launch night, in April 2021 in collaboration with Stacey Solomon, with whom it also launched its first sustainable collection during the year. The April 2021 launch took orders worth more than £1m in the first hour after launch and at peak processed 500 orders per second. Jac Jossa, Lorna Luxe and newcomer Gemma Atkinson were among the influencers that it worked with.
In the Style, ranked Top150 in RXUK Top500 research, also collaborated with Dame Deborah James of Bowelbabe on a range of T-shirts that have so far raised more than £1.25m for the Bowelbabe fund at Cancer Research UK.
In the Style today reports revenue of £57.3m in the year to March 31 2022 in its maiden stockmarket results. That’s 28% up on the same time last year, when it reported revenue of £44.7m. Direct-to-consumer revenue grew by 23% to £44.7m, while wholesale revenue grew by 52% to £12.6m.
At the bottom line, it reports a pre-tax loss of £1.5m, down from a pre-tax profit of £125m last time, reflecting investment in its technology platform and the need for working capital as its wholesale channel grew. The retailer said that while cost increases to its direct customers were well managed, wholesale margins reduced because prices are set in advance. Gross profit margins came in at 52% for direct-to-consumer sales, as last year, but wholesale margins reduced to 15% from 19%. The retailer now has a new invoice discounting facility to advance it 85% of receivables at a cost of 2% a year. Administrative expenses – including the marketing costs (+42% to £7.1m) of paying commission to influencers, equivalent to 12% of revenue – grew by 51% to £14.6m during the year while distribution costs grew by 36% to £10m as the retailer added capacity and as labour costs grew.
How shoppers bought
During the year the retailer’s platforms saw 48.2m visits from customers – up 4% from 46.5m a year earlier. Its apps were downloaded 850,000 times during the year and saw conversion grow to 3.16% as it expanded its product range and social reach and also added features such as ‘fast selling’ flags to produce, fast purchase and enabled shoppers to save card details.
Total orders grew by 13% to 1.5m, with 33,000 new customers each month taking its active customer base to 677,000 (+4%). Customers ordered an average 2.25 times a year – representing a 9% increase. Average order values grew by 21% to £52, both because of inflation and as shoppers bought from higher value categories such as occasion wear as lockdown restrictions ended
In the first quarter of the current year, trading has been “robust in a challenging trading environment” and trading has been broadly flat on last year. Wholesale revenue has declined year on-year as In the Style focuses on digital partners, including Asos and The Very Group and more recently European partners Zalando and About You, rather than physical partners. As of June 30 2022, the group had cash of £10.5m. It now expects revenue for the year to be broadly flat, and that it will report an adjusted EBITDA loss for the year of £2m.
The company says that it is both establishing new partnerships with established retailers and marketplaces and aims to find new ways to work with influencers – perhaps selling to different customer types, hoping influencers launch their own brands, or helping others to launch collections. “This,” it says, “could be accelerated through the right acquisitions.”
Sam Perkins, incoming chief executive of In The Style Group, says: “I am pleased to report that in our first full year as a public company In The Style has delivered further strong revenue growth, representing almost +200% on a two-year basis. This has been supported by encouraging improvements across all our key customer and brand metrics.
“Our purpose is to inspire confidence, and this drives us to create unique products that help our customers to feel great about themselves. We have a strong, inclusive brand and differentiated influencer collaboration model which gives us fantastic reach, highly effective marketing, and broad customer appeal. This underpins our long-term confidence to create one of the UK’s most exciting fashion brands.
“This year is expected to be a challenging one for consumers and retailers. We are taking actions to respond including prudent cost control, cash management and executing against our refined growth strategy.”
Perkins has joined from The Very Group to replace Adam Frisby who founded and led the group for its first eight years and has now stepped into the new role of chief brand officer.
Growing supply chain issues meant that the retail brand responded to disruption from Covid-19 and the Russia-Ukraine conflict by finding new suppliers, moving away from China and towards Morocco and India. During the year it also mapped its supply chain for improved visibility and improved its due diligence processes when adding new suppliers.