Rixo’s sales rise stalls in latest year, profits dented by future growth investment

Rixo’s accounts for the year to last June have just been filed and they show an interruption to the buoyant sales performance it had seen in the previous financial year.

For 2023/24, revenue dipped to £18.7 million from £19 million in what the company said was an “uncertain market with subdued consumer spending in a period of difficult trading conditions”.

In the 2022/23 year, the retailer had seen sales growth almost in double digits. Admittedly, it was the first full year without a Covid impact but a sales rise of 9.1% was still impressive. 

Gross profit this time dropped to £13.8 million from £14 million and operating profit was down to just over £303,000 from £2.3 million a year earlier. Profit before tax also dropped sharply to £391,000 from £2.3 million and net income for the year was just £251,000, down from £1.8 million.

The company’s administrative expenses also increased from £9.2 million in the previous financial year to £11.2 million this time.

But the fact that profit fell and its admin expenses jumped sharply is a reflection of the company’s investment in future growth. In the year, it said it continued to build brand awareness by investment in digital and brand marketing alongside opening stores. And that’s what drove the short-term reduction in its profits.

Rixo, which celebrates his 10th anniversary this year has built a strong vintage-inspired contemporary women’s world business selling through both wholesale and its own retail stores plus its webstore.

The company, which recently entered homewares, said it has extended the lease on its Marylebone High Street Store but took the decision to close it temporarily to undertake an extensive refurbishment with the goal of enhancing the in-store experience for its customers. That’s an important location and the closure would also have acted as a sales suppressor.

It’s also continuing to focus on its business beyond those who can get to its London stores and that includes investing in its online platform and in wholesale. It has set up subsidiaries in the US and in Ireland to open new stores and develop the wholesale operations further. During the year a store was opened in New York as part of this investment plan and only last month it signed a lease for a unit in Ireland’s Kildare Village.

Profits at the business had fallen in the 202/23 year too — despite the strong sales jump — and for the same reason as this time with the company investing heavily in the growth that should set it up for stronger profits several years down the line. Those investments had included opening stores on London’s King’s Road in Chelsea and on Carnaby Street in the West End.