Men’s heritage brand Wolsey and sportswear brand Morley have halved their combined annual losses to £3.1m for the year ended February 28, despite a 14.6% fall in revenue to £5.5m.
“This year has been challenging but we have seen a significant reduction in our operating losses and the directors believe that we have made the necessary progress in the development of the business,” said managing director Danny Brown in documents filed at Companies House.
“The investment in our brands in both our home and export markets carried on in the year under review and our intention remains the continued development of our business and our brands, across our existing markets.”
Gross margin fell 8% to 25% by the year end.
The group, which is owned by Jamey Hargreaves, son of Matalan founder John Hargreaves, had net liabilities of £12.5m, up from £9.4m in 2014.
Loans due to the Hargreaves family will not be due for repayment until the business is able to afford repayment for a period of at least 12 months, the documents said. The Hargreaves family has confirmed they will provide financial support to enable the company to trade as a going concern, if required.
John Hargreaves provides a £2m guarantee for the company’s overdraft facility with Lloyds Bank.