Monsoon Accessorize will close underperforming stores and improve its ranges as part of a turnaround plan, after a slump in sales and profits.
Sales at the womenswear and accessories chain fell 7.8% to £509.1m for the year to August 30, while EBITDA was down by 18.7% to £50.6m.
The board and management, which includes new interim chief executive Paul Allen, said they will close unprofitable stores and operations, as well as reducing stock levels. They are also identifying measures to strengthen the Monsoon brand.
The group said sales had been affected by weaker trading in both the UK and international territories, combined with unseasonal weather patterns and adverse foreign exchange rates in a number of its markets.
Founder Peter Simon said clothing brand Monsoon’s performance was particularly disappointing, adding: “Although much of this was due to the unseasonal weather conditions, we have work to do here to improve the range.”
Allen joined the group as interim chief executive from Jacques Vert Group in February this year, and has since introduced a group-wide two-year improvement programme.
The focus is on strengthening the brand and ranges, reducing costs, improving returns from store investments and tackling underperformance in its international business. The group will also look to enhance its digital and ecommerce offer.
“We expect these actions to bear fruit over the next two years, although there will be an inevitable cost in the current year, when we expect a further fall in profitability,” said Simon, who added the business had £82.5m cash at the year end and no external borrowings.
“Our strong balance sheet enables us to carry out this fundamental investment and restructuring over time, to be able to capture the maximum benefit.”
Allen added: “Although the results are disappointing, as interim chief executive I am committed to leading the implementation of our strategic transformation programme in the knowledge that I inherited a strong management team and dedicated and hard-working staff who will work together to carry through the necessary changes.”