Lingerie retailer Boux Avenue is in talks with landlords to renegotiate rents across its 30-store portfolio as part of its ongoing business review.
After another “challenging” year, Boux Avenue boss Theo Paphitis has announced the retailer is in talks with landlords and is “accelerating a strategic and operational review of the business, leaving no stone unturned”.
“One of the most significant factors we must address is the rents we are paying across our shopping centre destinations,” said Paphitis, as part of a trading update from his retail group, which also owns Ryman and Robert Dyas. “Boux is still paying significantly above-average market rents whilst competitors and co-occupiers have been able to completely realign their rental cost base, often through CVAs. This does not tally with the overall experience we have had with our other businesses located on the high street where we have made some progress in renegotiating rents back towards the market average following constructive discussions with a number of landlords.”
Boux Avenue’s sales have continued to be dominated by online spend. Almost 50% of total retail sales were made online for the six-week period to 24 December.
Paphitis added: “As a greater proportion of fashion sales migrate online in the UK, it’s clear that the relevance of shopping centres to fashion retailing – and particularly Boux’s core demographic of 18-to-30-year-old females – is dramatically different from what it was when we launched the business in 2011. It is not a surprise, therefore, that trading has been most challenging in the majority of our 30 Boux Avenue shopping centre stores, which has contributed towards a double-digit decline in like-for-like sales in recent months.”
As a result of poor Boux Avenue sales over the recent Christmas period, group like-for-like sales declined 1.3% for the six weeks to 24 December.
Boux Avenue implemented its turnaround plan last year. However, Paphitis said despite an “encouraging reaction” to new product under the helm of brand director Zoe Price-Smith, the business had seen “lower than planned growth…partially impacted by lower footfall…as well as an unsustainable cost base”.
Operating losses grew from £3.8m to £9.9m in the 52 weeks to 31 March 2018 as a result of tough trading conditions and supply chain issues.
Paphitis said: “We will look to address our cost base, in particular our rents, as well as addressing the appropriate mix of channels to match the changing needs of our customers. Given the significant importance of the review, this will be led by me personally, supported by our Group board.”
Boux Avenue will publish results for the new financial year pending the outcome of its review.