Brexit could threaten my Irish fashion business, warns designer Orla Kiely
Published 10/11/2016 | 02:30
designer Orla Kiely fears that 'Brexit' could be a threat to the Irish business of her international fashion empire.
The statement by Ms Kiely and her husband and business partner, Dermott Rowan, on Brexit is contained in the fashion brand's annual accounts.
They show that pre-tax profits at Kiely Rowan plc fell from £354,253 to £151,318 in the year to the end of March 31 this year.
Pre-tax profits decreased sharply as revenues fell from £8.16m to £7.2m.
The directors state that revenues declined as the business "continued to move away from low margin discounting".
Ms Kiely's business is headquartered in London and in the directors' report she and Mr Rowan said the UK's "exit from EU is a possible threat to our Irish business. A weak euro will also impact on margins in that territory."
Ms Kiely's fashion empire has been helped by the Duchess of Cambridge, Kate Middleton who has worn her distinctive print coats on a number of occasions.
Other celebrity fans include author and actor Lena Dunham and actors Keira Knightley, Kirsten Dunst and Zooey Deschanel.
A spokesperson for Kiely Rowan said yesterday: "We are moving from doing our own wholesale to using a distributor model, which means a short term revenue hit, but more stable revenue and cashflow going forward."
He said: "This arrangement will also help drive expansion in new markets such as the Far East, where things are going well. It will also reduce overheads.
He added: "Our online business is growing fast. We are also gaining traction in central Europe, have reorganised the US business and opened a new flagship store in West Village, NYC."
A breakdown of revenues shows that £4.83m were recorded in the UK with revenues in the US increasing from £1.12m to £1.57m.
Revenues in Europe - including Ireland - dropped rom £1.3m to £375,343.
The directors explain: "The change in geographical turnover is reflected by Republic of Ireland exports being handled through our UK distributor.
"The US turnover grew and we plan further growth in that market for the next year."
The directors state that cash flow was positive during the year with overall cash flow up by £420,031 with term loans reducing from £380,811 to £103,178 which are scheduled to be repaid by December 2016.
In the report, Mr Rowan and Ms Kiely - best known for her quirky, retro stem prints - state that the company will continue to expand into new markets and seek further distribution of our products.
Accumulated profits at the end of March totalled £2m.
Staff numbers decreased from 62 to 57 with staff costs reducing from £1.97m to £1.94m.
Remuneration for Ms Kiely and Mr Rowan increased from £324,306 to £406,148.
The highest paid director received £203,450.
In addition, £75,000 was paid in rent to Mr Rowan and Ms Kiely. Ms Kiely and Mr Rowan own the brand name 'Orla Kiely' and granted the company a licence to use the brand and charged £70,728 for its use last year.