Entrepreneur George Davies has injected close to £9m into the company behind his troubled womenswear chain GIVe and sports fashion business S’Porter.
According to The Sunday Telegraph, accounts for S’Porter showed that there was a “material uncertainty” over the company’s future after S’Porter’s directors said Davies could have to plough in further funds on top of the near £29m already invested.
Auditor Grant Thornton said group liabilities exceeded assets by £1.4m.
Sales and profits slump
Revenues at S’Porter fell 26.8% to £23.2m in the year to October 2009. The business notched up a loss of £3.8m in the year, compared with a pre-tax profit of £3m the year before.
In the accounts, filed at Companies House, the business said that since the end of October last year GIVe had not met expectations in terms of sales and profits. Following a review, it said, the business had “relinquished a number of the non-profit making stores”.
In September Davies, the man behind Next, George at Asda and Marks & Spencer sub-brand Per Una, closed his flagship GIVe store on Regent Street almost a year to the day after the launch of the chain which targets the mid-thirties woman.
Return to profit in medium term
A S’Porter spokesman told The Sunday Telegraph: “The lower-than-expected sales, together with the strategic restructuring currently being undertaken, have resulted in additional cash funding being needed to meet working capital requirements…The directors anticipate seeking further funding from the same source where necessary.”
Grant Thornton said that post the restructuring the business could return to profitability “in the medium term”.
Davies invested £8.68m in the business this year. He invested £20m to launch the business with six standalone stores and 16 concessions in department stores including Beales.
Multi-brand offer confirmed
The business also confirmed that it would introduce other brands in to GIVe’s stores, in a move first revealed by Drapers in August when the chain said that it would introduce womenswear retailer and brand Ghost into its flagshop stores.
S’Porter added that only one month’s trading from GIve was included in the results to October and that the sales slump was a result of the closure of its supply chain relationship with Per Una.
Revenues from the fashion sportswear business were static year-on-year.