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Reiss profits dip on increased costs

Reiss recorded a 10% fall in operating profit to £8.8 million for the year ended January 31 2008, because of increased costs attached to global expansion at the company.

Reiss sales rose 18% to £67 million over the period, while EBITDA fell back to £11.9m from £12.5m in 2007.

This excluded losses from Reiss’ US operation which widened from £700,000 to £2.3m.

Reiss said that investment in infrastructure and management had been accelerated last year to enable the business to develop into a global brand. The premium fashion retailer intends to grow to 250 stores worldwide.

Reiss said in a statement: “To facilitate this, the central cost base increased significantly in the UK, which culminated in 2008 with a move to new headquarters in central London. In addition, there were additional costs to set up a US headquarters and distribution centre, and US importing costs were impacted, by the building of volumes to a critical operational size.”

Reiss added: “The directors consider that, following the investment in the infrastructure and growth opportunities, notwithstanding the current economic uncertainty, the company is well placed to improve its long term profitability.”

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