Castore swings to pre-tax loss of £28.8m despite sales surge
Its UK turnover also increased from £79.8m to £106.1m while its Europe turnover jumped significantly from £25.3m to £59.6m
British sportswear brand Castore has reported a pre-tax loss of £28.8m for the year ended 4 February 2024 after previously recording a profit of £14.7m the prior year.
The group stated that this result has been impacted by non-recurring warehouse consolidation, ongoing investment in the cost base and a challenging economic climate in which inflation and interest rates have impacted discretionary spending.
Its gross profit margin also decreased from 69.6% to 66.5%.
However, Castore sales increased 65% to £190m despite a number of macroeconomic headwinds. This growth has been supported by strong development in both its partnerships and mainline brand divisions.
Its UK turnover increased from £79.8m to £106.1m while its Europe turnover jumped significantly from £25.3m to £59.6m.
Additionally, in North America, its sales grew from £3.1m to £4.4m and the rest of the world saw a rise of £20m, up from £6.6m.
The period has also seen continued investment in people, systems and infrastructure to support our continued long term growth ambitions.
During the period, average headcount increased from 399 to 517, the number of physical stores and websites increased to 68 and the higher throughput of product necessitated the expansion and addition of storage and fulfilment centres and suppliers.
Despite material up front cost, these investments are expected to deliver “strong returns” over the medium term and the directors remain long term focused in their view of value creation.
Castore said: “As part of a strategy to improve the efficiency of its supply chain, the business sought to consolidate some of its UK storage facilities over the second half of the period. This resulted in the closure of a warehouse facility in Milton Keynes and migration of stock to a larger facility in Knowsley.
“This move took longer than anticipated and some early teething issues impacted trading during the Black Friday and Christmas trading periods, where we experienced unprecedented demand. The directors are pleased to report that processing times have subsequently returned to normal levels and that the company has invested in dedicated project management resources to mitigate the risk of similar issues in the future.”
