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In The Style swings to FY pre-tax loss despite strong revenue growth

By Huw Hughes

20 Jul 2022


Image: In the Style

Manchester-based fashion e-tailer In The Style has swung to a full-year pre-tax loss despite revenue growth of 28 percent.

In the 12 months to March 31, the company posted a pre-tax loss of 1.5 million pounds compared to a profit of 125,000 pounds the year before.

It cited supply chain disruption and inflationary pressures linked to Covid-19 and the Russia-Ukraine conflict as contributing factors, as cost increases for products and freight put pressure on its gross margin.

On a more positive note, revenue increased to 57.3 million pounds compared to 44.7 million pounds a year earlier, which it said was driven by its ongoing expansion and the optimisation of its influencer-based business model.

Breaking it down by channel, direct-to-consumer (DTC) revenue was up 23 percent to 44.7 million pounds, while wholesale revenue was up 52 percent to 8.3 million pounds.

In terms of more recent trading, In The Style said the first quarter of the year has been “robust in a challenging trading environment”.

Total revenue was broadly flat year-on-year in the quarter, with the DTC channel up 12 percent but the wholesale channel down.

Its overall gross profit margin was in line with the first quarter of the previous year.

It said its customer KPIs have continued to improve and return rates have been in line with expectations.

FY23 outlook

Looking ahead at the full-year, the company expects group revenue to be broadly flat, with DTC revenue growing at mid-single digit rates and wholesale revenue dropping at a double-digit rate.

In The Style expects an adjusted EBITDA loss for the year of 2 million pounds in light of “very uncertain market conditions”.

Chief executive Sam Perkins told investors: “I am pleased to report that in our first full year as a public company In The Style has delivered further strong revenue growth, representing almost 200 percent growth on a two-year basis.

“This has been supported by encouraging improvements across all our key customer and brand metrics.”

Perkins added: “This year is expected to be a challenging one for consumers and retailers. We are taking actions to respond including prudent cost control, cash management and executing against our refined growth strategy.”

In The Style