Smythson results improve but losses persist

Luxury leather goods and stationery retailer Frank Smythson has filed its accounts for the year to the end of last March and said that its business improved.

That came as the economic situation in the UK and globally showed signs of recovery from the disruptions caused by the pandemic and despite the fact that challenges persisted.

Turnover for the business increased to £27.26 million from £23.65 million and gross profit rose to almost £19.6 million from just over £16 million. The operating result was still a loss, but it narrowed slightly to £5.9 million from £6.9 million and the loss both before and after tax was also down at £6.6 million from a negative £7.3 million a year earlier.

Looking at sales in more detail, the company saw like-for-like sales growth of 4.6% year on year, even though retail traffic fell by 8.7% and was boosted by conversion growth of 0.9%.

Its travel locations, while it said they were “much improved”, continue to feel the impact of reduced passenger numbers and less international travel.

But online, the business performed better with like-for-like growth of 5.1%, an increase in traffic of 0.7% and a conversion rise of 4.8%.

Meanwhile, the wholesale business (B2B) was still affected by high stock volumes, slow traffic in department stores and a few “uncertain financial positions” within large players, specifically Matches and KaDeVe. This translated into wholesale buyers spending less with the business. Yet its Corporate ops benefitted from a renewed interest in brands and corporations investing in rewarding their VIP clients and executives. This translated into strong growth versus the prior year.

The company’s strategy continues to focus on refining its retail network, It exited loss-making stores to create a more stable base of overheads and enable its effort and investment to be concentrated on growing brand visibility as well as on its digital channel. It expanded its presence in key markets and invested in marketing and digital expansion. And the company said that the “difficult decision” to close its flagship store on New Bond Street, London, was taken as part of that strategy.

During the year, the company invested in people with a new digital director to improve its online businesses and new agencies brought in to improve domestic and international sales. It also took on a new marketing director at the end of the financial year while a business development director joined in January 2024 “to expand and create a new model for” B2B.

The decision about the aforementioned New Bond Street closure was taken during the financial year in question but the shop actually closed just after the year ended. In August 2024 it also shut its store in Heathrow Terminal 5 due to improvement work at the terminal. But it’s working closely with the airport’s management to find another space in the same or other terminals (possibly more than one space) in order to continue with what’s an important high-traffic location for the brand.

Also after the financial year end, this January, its new Japanese distributor Look Inc began operating the local business starting with e-commerce and followed by Isetan men’s and a flagship[ in Ginza 6.