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Exclusive: White Stuff sales grow but investment hits profits

White Stuff has returned to sales growth, but increased digital investment and discounting has hit its bottom line.

As the clothing and lifestyle retailer’s transformation programme takes effect, total sales rose 2.6% for 12 months to 27 April 2019 year on year, compared with a fall of 6.2% in 2017/18. Online sales were up 8% on last year and now comprise 32% of the total. In-store sales edged down 0.2% but wholesale was up 4.3% year on year. International sales, meanwhile, were up 28.3%.

An increase in investment in digital marketing, higher-than-planned levels of discounting and increases in costs, including pension auto-enrolment, have taken a toll on profit. EBITDA dropped 32% to £4.1m for the year.

During the year the business expanded its digital footprint in the UK through Next Label, and in Germany through stores and online. It invested in operations to accelerate wholesale sales, and started a significant investment in IT systems over the next three and a half years, to improve process efficiency.

To drive multichannel growth White Stuff has appointed The Body Shop’s managing director North America, Toby Milton, to the newly created role of multichannel director, with effect from October.

Milton will be responsible for delivering a consistent customer experience and trading stance across all White Stuff customer touchpoints, including shops, online, wholesale and market places.

On current trading White Stuff said May and June were “challenging”, and the team is controlling costs tightly across all areas of the business to respond to any further deterioration in consumer confidence.

The retailer said it was focused on “developing great product ranges together with a deeper understanding of customers, and driving more targeted communication on the quality of product and the strength of the brand”.

CEO Jo Jenkins, who joined the business in April 2018, said: “In a tough retail climate, we have focused on core trading principles, which have allowed us to end the year with positive sales and reduced levels of stock in the business.

“As we look to the future, we are investing in our people and systems to give us a strong platform for growth. The leadership team is in place to accelerate our transformation, ensuring we create a positively differentiated experience for customers in all that we do.

“We remain cautious about the outlook given the uncertainty of the Brexit outcome, and we continue to manage the business tightly, to respond to the market changes, driving growth online and internationally.”

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