End of year profits for Bectin, which owns The White Company and Charles Tyrwhitt, have fallen after the menswear retailer abandoned a major software project.
Bectin, which is itself owned by Charles Tyrwhitt founder Nick Wheeler and wife Chrissie Rucker, who founded The White Company, has reported that gross profit for the year to 25 March 2017 totalled £14.9m. This is down on the £15.9m reported in 2016. Profits attributable to the company owners also dipped to £15.1m, compared with £15.8m the previous year.
The pair said this came after its menswear business Charles Tyrwhitt abandoned a “major software project” during the year, which led the group to incur exceptional charges that made up the vast majority of its £135.1m administrative expenses.
Bectin acquired The White Company in June 2015, and then the trade and certain assets of Charles Tyrwhitt in August of the same year. As a merged entity, operating profit reached £21m, up on £19.4m in the previous period.
Group turnover in the UK grew to £267.8m, rising from £227.9m in the comparative period. Across the rest of the world, turnover increased to £125m in 2017, up from £71.3m.
The accounts, filed with Companies House, also show turnover at Charles Tyrwhitt grew to £194.4m in the year to 25 March 2017. In the period between 17 July 2015 and 26 March 2016 sales were £114.7m. It did not provide like-for-like figures or a profit breakdown.
The menswear retailer’s net assets stood at £125.9m, which was down on the £131.2m reported for the 2016 financial year. It also opened two stores during the financial year.
As reported in December, The White Company posted a rise in full-year profits and sales. Operating profit grew 2% to £17.6m in the year to 25 March, while sales rose 7.6% to £198.4m, after its UK stores and website saw “solid growth”.
Wheeler and Rucker highlighted that although it was “difficult to gauge” the implications of the UK’s decision to leave the EU, which has resulted in “uncertainty for the outlook of the UK economy”, its presence in overseas markets has given it a “strong position to continue its growth”.
They also pointed to their exposure to foreign exchange risk, since some of the company’s goods are bought in US dollars and euros. To mitigate this, the business has entered into forward foreign exchange contracts as well as putting credit facilities in place to manage seasonal working capital requirements.
Foreign exchange contracts that were due within a year stood at £53m at 25 March 2017, up on £29.9m at the same point in the previous year.
In order to stay competitive, the group will focus on improving product quality and ranges as well as its service offering. It also plans to open more stores in the UK and invest in its infrastructure.