Aurora Fashions is on target to deliver sales growth for the current financial year – its last as a single unit – but costs associated with the group demerger could mean it posts yet another loss.
The business, which at present is made up of womenswear retailers Oasis, Warehouse and Coast, this week published annual results showing total sales had risen 2% to £412.5m in the year to March 2, 2013, but earnings had fallen.
Pre-tax operating losses before exceptional items rose to £7.5m from £5.9m, while EBITDA from continuing operations fell from £12.7m to £9.3m.
Aurora deputy managing director Jess Wilks told Drapers the team was pleased with the uptick in sales, explaining that much of the loss came from investment in multichannel and international operations.
“It was a conscious investment decision – we are setting ourselves up to be in the right place for the future,” she said.
Aurora is already reaping the benefits of the investment, with omnichannel driving the three retailers’ Christmas performance.
Figures shared with Drapers show that like-for-likes rose 3.4% in the five weeks to January 4, while margins grew 2.7 percentage points.
Wilks said this was “across the board”, although added that Oasis had seen “really strong performance”.
Looking over the current financial year, which runs to the end of February, trading has continued to be positive, although Wilks warned there would be further costs associated with the ongoing restructure.
“From a trading point of view, we are pleased with how we are trading as we approach year-end,” she said.
The demerger, which was announced last spring, will see Coast spun out as a separate trading entity later this year. Oasis and Warehouse will continue to report as a single unit, called Fresh Channel, while Aurora will cease to exist.
Separately, Karen Millen – which also used to be part of Aurora – reported its Christmas update this week.
UK and Ireland sales climbed 12% over the three weeks to January 4 as global revenues rose 10%. The business posted growth across all categories, with improved margins thanks to a rise in full-price sales.
Spain was the best-performing country, climbing 25% in the period, while France rose 22%. Denmark came third with a 16% rise. Global revenues now make up 65% of the total business.
Chief executive Mike Shearwood said: “We have spent the last year investing heavily into the business and its infrastructure and we are excited about the future.”