A steep rise in international sales in the second half of 2018 helped Fat Face record a 2% rise in revenues to £122m.
The results for the 26 weeks to 1 December showed that international sales were up 59% to £8.7m. EBITDA for the half-year was up 4% to £15.5m, and ecommerce sales rose 6%.
The lifestyle retailer also released figures for the Christmas and New Year period. It said that although early trading in November had proved to be tough, ecommerce sales over the five weeks to 5 January were up 16%, which offset a drop in bricks-and-mortar sales of 6%.
Ecommerce over the Christmas period had grown by 47% in two years, and international sales grew by 32% for the Christmas period – by 65% in two years.
Chief executive Anthony Thompson said that unusually warm weather meant that Fat Face brought forward several spring items to sell in the pre-Christmas period. In December, women’s jersey rose 16%, dresses 14% and women’s shirts 25%. Conversely, women’s nightwear fell 14% year on year in December, knitwear fell 3% and outerwear 15%.
“We brought forward a lot of our spring season to two weeks before Christmas,” said Thompson. “The warm weather in November and December was surprising – for jersey to be up that much. We’re talking about T-shirts. It amazes me and shows that the weather had an impact on sales [seasonally]. As soon as the weather failed to turn I knew that we would not have a vintage Christmas [trading season].
“Coming off such a strong year, we matched sales in a much tougher environment. The investment in online and international have paid off and the US had a massive Christmas.”
Thompson, who departs from his role as Fat Face chief executive at the end of January to be replaced by Liz Evans, said that he felt UK retailers needed to take stock of the mixed results on the UK high street in over the recent Christmas season.
“I do think the whole thing of discounting has come home to roost. Every year everyone, including Fat Face, will have a moment and say ‘Should we go on Sale?’ I saw a lot of brands go on Sale earlier than last year. When we looked at the impact of bringing forward our Sale, it didn’t make financial sense.
“We would have got sales in the door, but not the profit. It was not a sustainable model. Clothing retail in the UK needs to press the reset button on what happened in November.”
Thompson was also critical of the Black Friday promotions, which had been less successful in 2018 than previous years.
“Customers want more than just Sale banners on Black Friday. This year it became just an online event – if the high street wants more traffic it needs to move beyond discounting and offer something for families.”
Thompson noted that the fall in UK in-store sales – both at Fat Face and across the broader high street – meant that the retailer was less likely to open a large amount of branches. However, he indicated that there was room for up to 20 new locations in the medium term.
He added: “When we reviewed our store estate we were clear that there is an absolute shift in shopping patterns across channels. We have a healthy store estate – we don’t carry locations that make a loss and our average lease length is 3.8 years.”