Retailers cannot blame Brexit for poor performances across the high street and the clothing industry is “its own worst enemy”, Fat Face chief executive Anthony Thompson said today.
Anthony Thompson Fat Face
Fat Face’s sales for the year to 28 May increased 7.4% to £220.7m, but currency headwinds, a warm autumn and investment in the business caused its EBITDA to drop 8% to £33.5m.
Thompson told Drapers that weakened consumer sentiment and a drop in the value of the pound on the back of the vote to leave the European Union was not to blame for the tough trade many businesses are experiencing. Rather, retailers must take responsibility for controlling inventory and price mark downs.
“The last eight to 12 weeks have been volatile but Brexit can’t be pointed at and blamed for poor performance,” he argued. “It’s not all down to the weather either. We’re not helping ourselves by over stocking the market and pressing the discounting button at the first sign of soft sales. It’s a corrosive problem and it’s going to be brutal going into 2017.”
He added: “Poor performances are down to a mixture of things. Some are out of our control, but we can - and need to - control our inventory and our markdowns.”
However, Thompson said the devaluation of the pound would continue for the medium to long term. Fat Face’s prices will increase next year as a result.
“We are reviewing our price architecture and prices will go up by low single digits in spring,” he said. “We’re also reviewing our inventory and sourcing some suppliers closer to home with shorter lead times so we can be more flexible.”
The chief executive said trade in the run up to Christmas was “hard to call”.
“In the medium term October and November will be volatile. We will know by the end of November how Christmas will hold. We’ve had two very warm, wet winters; if there’s a cold snap the market can rebound.”