Bags brand Radley losses narrow, plans targeted US price rises due to tariffs

Radley — or more accurately parent company Laddie Topco — has filed its accounts for the year to the end of April 2024 and also said it’s looking at price rises in the face of new US tariffs.

Turnover at the bags and leather goods brand fell to £71.9 million from £77.3 million, although the operating loss narrowed to £1.6 million from £7.4 million a year earlier on the back of a favourable comparison as there had been a non-recurring item that dented income in the previous year. The loss before tax was £9.4 million, down from a loss of £14.3 million the year before and the net loss narrowed to £8.18 million from £14.3 million. 

The company also said group EBITDA before non-recurring items this time was a positive £2.7 million, although this was lower than the £4.3 million 12 months earlier.

Clearly it was a challenging year but group CEO Nick Vance said there were some plus points. It saw 3.8% like-for-like growth in DTC sales, delivering rises in both the key markets of the UK and US. The UK market saw a 3.7% uplift and the US a 4.7% rise.

The DTC share of total sales also increased to 79% from 73% and gross profit rose by 255 basis points. Digital sales were strong with a 10.3% overall rise while store sales saw a more modest increase but were still positive, rising 0.4%.

So why the 7% total turnover decline and lower EBITDA? That was due to softness at wholesale partners globally. In fact, global wholesale declined by 30%, partly impacted by systems disruptions pre-peak, but also reflecting partnerships moving towards dropship and marketplace models.

Licensing revenue was up 8% at £1.4 million though and remains an important growth area for the company in non-core categories such as watches, jewellery, eyewear and beauty (which was new for FY24).

The company includes Radley+Co that manages the brand’s UK, European and Asian DTC and wholesale ops, as well as Radley USA, which manages sales and distribution to North America.

Looking in more detail at specific regions, Radley+Co sales fell 3% in the year due to those reductions in sales to wholesale partners and the aftermath of a ransomware attack in August 2023. It accounted for 83% of the group’s total sales during the period.

As for Radley USA, it made up 17% of all external group sales, although its sales were down 19% year on year. That said, the Radley USA website traded strongly and was up 50% in the year. The local sales fall overall was caused by the closure of three loss-making stores and the “underperformance of a key wholesale partner”. 

Yet the company said the USA “remains the key international growth market for the group”. 

But as many companies are finding at present, it remains a tough market to approach given the current tariffs situation. As mentioned earlier, price rises are on the cards as the company said new taxes on goods being imported from India could cost it between £0.5 million and £1.3 million. It will bring in “carefully positioned” US price increases to offset higher costs and “fully expects” rivals to take similar actions.