Cotton Traders sees sales and profits dip amid ‘challenging conditions’

British heritage fashion brand, Cotton Traders, has seen its FY23 operating profit fall 9.9% to £9.8m in what it called a “steady performance” in the face of inflation and the cost-of-living crisis. The brand also reported turnover of £109.4m (-1.7% vs. 2022) and an EBITDA of £11.57m (-7.9%vs.2022). Amongst other factors, the company credits its consistent performance to a combination of “heavily invested, digital-orientated marketing activity, a growth in active customer retention (+0.9% increase YOY), and investment into the brand’s physical stores”. 2023 saw Cotton Traders extend its partnership with TV star Will Mellor, and the introduction of two new female celebrity partnerships: Broadcaster Alex Jones, and ‘A Place in the Sun’ Presenter, Jasmine Harman. The online-focussed marketing strategy enabled Cotton Traders to sustain brand awareness at 95%, as well as reaching a new, younger demographic ensuring relevance for the brand. Meanwhile, it saw online penetration increase +2.6% YOY, driven by continued new customer acquisition through digital channels, continued migration of traditional customers to online shopping and increased basket spend - with website sales +6.2% YOY and app-based sales +11.1% vs 2022. Its menswear category also saw sales remain consistent YOY, with strong sales of shirts (+20%) and knitwear (+11%). Meanwhile, womenswear performed particularly well with an overall category increase of +10% YOY. This was driven by increased purchases in women’s trousers (7%), woven tops (+13%) and significant range extensions in Cotton Traders’ underwear and loungewear ranges, helping to contribute to the overall growth of the brand’s womenswear category. 2023 saw the resurgence of physical shopping in the retail industry. During this time, Cotton Traders invested into its physical stores, with 21.5% of its sales directly from stores (+0.6% YOY) and orders in-store growing by 11.4% YOY. As part of the brand’s investment strategy, it opened 10 new stores, two stores relocated to increase space, nine stores were refitted – resulting in 81 (93%) stores all delivering profitable performance. Cotton Traders CEO Nick Hamblin said: “It’s promising to see our investment into physical stores paying dividends with an uplift not only in sales year-on-year, but also orders in-store. The cost-of-living crisis has resulted in low consumer confidence and macroeconomic turmoil and we are so proud our customers remain loyal to the Cotton Traders brand despite the wider economic challenges. “Continued customer retention, combined with an 11% increase in app sales and a growth in online penetration year on year are all testament to the success of our wider growth strategy.Customer loyalty remains strong, which can be credited to our competitive price point in the market and strong product offering - customer loyalty plays a huge part in purchase decisions which is why we’ve continued to invest in the right areas to enhance all our customer touchpoints.” He added: “We’re looking forward to the next year which will see us implement our marketplace growth strategy, something we’ve already experienced success with through our full year of trading on Debenhams.com and soft launching on Freemans.com late last year.”