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D2 says first-ever loss is ‘just a blip’

Sir Tom Hunter’s young fashion chain D2 has posted the first loss in its six-year history. Accounts filed this week at Companies House showed sales at the business were flat at £50 million for the year to January 31, while pre-tax losses hit £1.7m against a pre-tax profit of £1.4m the previous year.
However, a spokesman for D2 said a £1m investment in store refurbishments, and a new management team led by co-founder Alan Kinney, would return the business to profit next year.

He said the results were a blip. “It has been a tough retail climate on the high street. Now we have invigorated the management team with young and aggressive people, we are confident for the future,” he said.

Kinney has been charged with buying product across two of Hunter’s businesses – D2 and branded young fashion chain USC – which he owns via his West Coast Capital fund. Kinney will work closely with new operations director Steve Davidson and logistics director Gary Connelly, who have both been promoted up the ranks at D2 to revitalise the business.

Connelly has been tasked with ensuring D2 is able to compete with high street rivals by speeding up the supply chain.

It is thought Davidson will oversee the opening of up to five new D2 stores this year and a rolling £1m refurbishment plan, which has seen 18 stores in the portfolio refreshed over the past year.

D2 has 80 stores and has signed Danish brand Jack & Jones for this autumn. The brand will join D2’s existing brand roster, which includes Kangol in menswear and Hoi Polloi and Ben Sherman for women.
D2 was founded in 2000 by Hunter, Kinney and Jim McGonigle by combining clothing chains Jeans for Sale, Jeansters and Fosters Menswear. McGonigle became chief executive of USC in January last year, after stepping down from his chief executive role at D2.

Separately, Hunter’s West Coast Capital firm remains “committed” to its footwear chain Qube, amid speculation about poor trading at the business.

Office and Qube chief executive Brian McClusky told Drapers that “a few” Qube stores were on the market, but said there were no plans to rebrand Qube shops to sister chain Office.

“We are not closing the business and there will be no rebranding of shops,” he said. “Like-for-like sales are up by about 22% this year and margin is just under 7% up. This is down to much better product, a new price architecture and good sourcing out of China, which has boosted margins.

“Qube is performing really well and we are absolutely not going bust. Like all businesses, we have a few stores that are being marketed at a low level, but suppliers have nothing to
be concerned about.”

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