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Reiss sales up but profits slip in ‘transitional’ year

Sales at Reiss increased 4.6% to £172.2m for the year to 3 February 2018, but EBITDA fell 26% year on year to £14.2m, as it repositioned in a “transitional” year.

Reiss said the drop in profits was the result of product availability issues, the weakness of sterling and investment in the website.

It also incurred a non-cash impairment provision of £14.2m in relation to several underperforming overseas stores and £2.1m of exceptional re-organisation costs during the year.

Reiss said it had “revitalised and evolved” its customer offer and rectified product availability issues, as well as investing in its website infrastructure and experience.

In 2018 Reiss signed a global shoe and accessories licensing agreement with Global Brands Group, a franchise agreement with South Korean department stores Shinsegae, and new wholesale accounts with Nordstrom in the US and in El Corte Inglés in Spain.

UK like-for-like sales for the six months to 4 August were up 6.7%, while international sales were up 16.4% compared with 2016/17.

Reiss said no further exceptional impairment charge was expected in 2018 given the improved sales performance.

CEO Christos Angelides said: “Last year we put in place the building blocks to reposition and refresh the Reiss brand, product and website proposition. We also signed some important new franchising and licensing agreements and, with the right team in place, we have taken steps to improve our operational execution.

“Our customers have responded positively, and the business has performed well in the first half. Sales growth has accelerated through September and October as the autumn/winter collection has been launched, with like-for-like UK sales up 15% and international like-for-like sales up 14.8% in the first 10 weeks of the second half.

“We anticipate that these trends will continue throughout the rest of the year in all of Reiss channels to market, which should result in improved profit growth versus last year.”

The business continues to bolster its senior team under Angelides. Jamie O’Hare, senior designer at Tom Ford, is joining as womenswear design director, reporting to womenswear director Una Joyce, Drapers understands.

Angelo Perna, former director of global digital media at Burberry is joining as global head of marketing.

Reiss was founded by David Reiss in 1971. It has more than 187 points of sale – own stores and stockists – in 16 countries.

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