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Aquascutum losses mount in year before sale

Aquascutum suffered mounting losses in the year before its sale to to Jining Ruyi Investment Co, a holding company of China’s Shandong Ruyi Technology Group, for $117m (£95m).

The British brand increased turnover by 28% to £13.2m in the year to 31 March 2016, driven by a rise in wholesale sales.

However, its gross profit margin fell from 44.9% to 31.7% during the year and losses swelled to £6.8m from £2.7m in 2015.

It said this was due to costs associated with opening new stores, store refurbishments and an expanded head office team, as well as adverse foreign exchange movements and loss-making stores.

The company blamed the margin decline on a shift to the lower-margin wholesale channel and an increase in stock impairments for aged stock. Retail sales made up £8.2m of total sales, while wholesale accounted for £4.9m.

The group made £9.9m of its sales in the UK and £2m in Asia, with the rest in Europe, the Americas, the Middle East and Africa.

YGM Trading bought Aquascutum out of administration for £15m in 2012 and invested in the business by opening new shops and increasing its marketing.

But its directors concluded the firm needs “further and substantial” investment to enhance its competitiveness and operating efficiency, which prompted the sale.

 

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