Image: screenshot of Seraphine.com
Séraphine has lowered its full-year profit expectations once more. The maternity clothing pureplay says it’s “not immune” from pressure as consumer sentiment weakens across Europe following Russia’s invasion of Ukraine and as the cost of living rises. It now expects, in a trading update for the year to April 3, that full-year sales will come in at about £44.1m and adjusted earnings before interest, tax and one costs (EBITDA) at at least £3m. In a February trading statement issued just before the Russian invasion of Ukraine, Séraphine had already lowered its profit expectations to £4.4m.
The retailer says that it has seen sales grow by a third (33%) this year, compared to last year, and by 52% in North America, when currency fluctuations are excluded. It has launched in Canada, Switzerland and the Netherlands, where sales have grown quickly. But it says costs have increased at the same time, in areas from distribution to customer acquisition marketing. Currently acquisition costs are 25% up on last year. Added to this, some new one-off costs – related to customer refunds and stock adjustments have been identified.
Looking ahead, it says that sales in its 2023 full-year are now expected to grow by between 10% and 20% while profit margins are expected to improve to between 8% and 9%.
Séraphine is to take action by repricing some of its premium products while maintaining prices of its basic products. It will continue to invest in product design and in its in-house marketing capability, with more details set to be provided along with full-year results. In the meantime it has added a trading director and chief operating officer to its executive committee and is reviewing its forecasting and financial management to identify areas of improvement.
David N Williams, chief executive of Séraphine, says: “Despite the evident challenges faced by the industry and consumers, the group has seen strong revenue growth for the full year. This, combined with excellent progress in North America and expansion into a number of important new markets, reflects the underlying strength of the business.
“Whilst we are disappointed that a combination of internal and external factors has affected the outturn for the year and expect consumer sentiment to remain subdued in the short term, we are confident in the strong underlying fundamentals of the business and our ability to scale up and deliver growth in the medium term.”
Séraphine is a Top350 retail brand in RXUK Top500 research.