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Forever 21 UK makes £66.5m loss

Forever 21 (UK) has made a loss of more than £66.5m for the year to February 28, 2013, on the back of impairment charges of more than £44m.

The US retailer, which first launched in the UK in 2010 and has eight stores, grew UK revenues by 59% to £37m from £23.2m in 2012.

However, during the period it opened stores in Bluewater, The Trafford Centre and Lakeside, and the extension of its Oxford Street store, which appear to have severely dented its bottom line, with pre-tax losses reaching £66.55m, up from a £7.6m loss in 2012.

According to accounts filed at Companies House, Forever 21 had impairment losses worth £19.44m for leasehold acquisitions in the year, and a further £23.23m for leasehold improvement. Fixtures and fittings and computer equipment added to the £44.46m exceptional charge.

Additionally, operating lease rentals on land and buildings cost £18.3m.

Forever 21 (UK) also reported a rise in cost of sales, to £21.9m from £12.37m the year before. Gross profit rose 40% to £15.2m, from £10.8m, a slower rate than the retailer’s turnover.

A statement in the results said: “Whilst the company is loss making, the directors have obtained confirmation from the directors of the ultimate parent company Forever 21 Inc that Forever 21 Inc will continue to support the company for a period of not less than 12 months from the date of approval of the financial statements to enable the company to meet its liabilities as they fall due.”

A spokeswoman for the company said no one from the UK office was available to comment.

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