Today’s news in brief-18/10/24
Boohoo’s CEO, John Lyttle, is stepping down after five years, as the company embarks on a strategic review and secures a £222m debt refinancing deal. The retailer’s new debt facility includes a £125m revolving credit line and a £97m term loan, aimed at supporting future development. The announcement follows a 15% drop in revenue to £620m for the six months ending August 2024, with a 7% decline in gross merchandise value to £1.177bn. Adjusted EBITDA stood at £21m.
UK sales volumes rose by 0.3% in September 2024, outperforming analysts’ expectations of a decline. Despite a slower pace compared to the 1.0% growth in August, the increase was driven by strong demand in tech stores, particularly computer and telecommunications retailers, which saw 5.5% growth in non-food sales. Non-food stores overall saw sales volumes rise by 2.5%. In contrast, supermarket sales dropped 2.4%, reflecting the impact of unseasonably poor weather and ongoing consumer restraint on luxury food purchases.
Mothercare has secured a refinancing deal and entered into a joint venture with Reliance Brands UK, expanding its presence in South Asia. The £8m debt facility from Reliance will aid the company in developing its operations in India, Nepal, Sri Lanka, Bhutan, and Bangladesh. Reliance now holds a 51% stake in this partnership, replacing a previous franchise agreement. Mothercare used the proceeds from Reliance to refinance its £19.5m term loan with Gordon Brothers, which has now been replaced by an £8m two-year loan.
Furniture Village doubled its employee profit share payouts after a strong trading performance for the year ending June 2024. The company, which became 100% family-owned following a share buyback in 2022, recorded a 3% increase in like-for-like order intake, supported by better margins and cost controls. This resulted in a full-year profit of £12.3m, the highest outside the immediate post-Covid period
Hobbycraft reported an 80% drop in profits to £393,000 for the year ending February 2024, down from £2m the previous year. The craft retailer attributed the decline to inflationary pressures and one-off costs, though total revenues rose by 3.4% to £218.3m, with like-for-like sales increasing by 1%. Its gross margin also improved to 58.4% due to price increases, reduced freight costs, and growth in its own-brand sales, which now account for 45.5% of revenue.
