Smiggle sees full year sales and profits rocket, but boss laments ‘ghost towns’
The group, which opened a two-floor Oxford Street flagship outlet this month, has around 130 UK stores.
Australian stationery retailer Smiggle reported soaring UK sales and profits last year, but the group’s chief executive has bemoaned the wider turmoil on Britain’s high streets for creating “ghost towns”.
The company’s British arm posted a 92% increase in revenues to £55.7 million in the year to July 2017, according to accounts filed at Companies House.
Pre-tax profit rose from £3.8 million to £10.8 million, with Smiggle’s group managing director John Cheston lauding the firm’s online performance.
“We’ve seen incredible growth online, something we didn’t anticipate, which has been driving sales,” he told the Press Association.
“It’s not easy, we’ve had to work bloody hard.”
The group – which opened a two-floor Oxford Street flagship store this month and bills itself as the “ultimate creator of colourful, fun, fashion-forward stationery” – has around 130 UK outlets.
It had been targeting 200 stores as part of efforts to hit 200 million Australian dollars (£112 million) in revenue by 2019, but Mr Cheston said Smiggle may now not need that many, partly because of the growth of online.
He also flagged the recent spate of store closures on Britain’s high streets through Company Voluntary Arrangements (CVA), a form of insolvency that allows retailers to shut loss-making outlets.
Several retailers – including New Look, Carpetright, Prezzo, Byron and Jamie’s Italian – have undertaken the process this year, with more on the way.
CVAs, along with the administrations of Toys R Us and Maplin, have left in their wake hundreds of vacant properties on the high street, as well as a devastating trail of job losses.
“CVAs are creating ghost towns, there is a real sentiment issue in UK retail, you have Brexit, macro issues and political uncertainty.,” Mr Cheston said.
“We are in some respects immune, but not completely immune.
“We’re a pocket money business and if parents are cutting back on spending, then it has an impact on us too.”
Retailers have been hit by a surge in Brexit-fuelled inflation, which has seen the cost of goods rocket and consumer confidence plummet since the referendum result.
But Mr Cheston said that retailers also have to “fix their own mess”.
“They need the right number of properties with the right web offering.”