(Alliance News) - In The Style Group PLC on Thursday said it expected a challenging second half of the year, after a fall in revenue and a swing to loss in the first half prompted the launch of a strategic review and the return of the founder as CEO after only a year away from the hot seat.
For the six months that ended September 30, the Bradford, England-based online retailer of womenswear fashion reported a pretax loss of GBP3.1 million, swung from a profit of GBP890,000 a year prior, as revenue dropped by 11% to GBP26.6 million from GBP29.8 million.
Direct-to-consumer revenue slipped 0.8% to GBP22.8 million from GBP23.0 million, but wholesale revenue fell by 45% to GBP3.7 million from GBP6.9 million, blamed on the failure of an in-store trial with an unnamed partner.
Addressing its poor performance over the recent half, In The Style Group said it would continue to leverage its "distinctive influencer collaboration model" to drive "real interest" in its products.
Yet it was clear that fall into the red has taken a toll on company confidence, as revenue guidance for the year was revised on the basis of "uncertain" consumer sentiment.
In The Style said wholesale was likely to remain "a challenge", and now expects revenue for the second half broadly "similar" to that achieved in the first.
Further, the board on Thursday launched a strategic review of the business as a whole, saying there has been limited liquidity for shareholders "for some time" and suggesting that the underlying growth potential of the company might be better realised "under an alternative ownership structure".
The review may or may not result in a sale of the company or some or all of its business and assets, In The Style said.
The review puts the company into an offer period, but it said it is not in talks with any potential suitor and is not in receipt of any takeover approach.
Lincoln International LLC, a Chicago-based investment bank, has been appointed to assist with the process.
In The Style also announced the resignation of Chief Executive Officer Sam Perkins, who will leave the company on December 31.
In The Style's founder, Adam Frisby, will return to the role of CEO on an interim basis until an alternative is found.
Currently acting as chief brand officer, Frisby remained optimistic of the company's prospects moving forward despite the turmoil of recent months, but warned of future challenges.
"Gains in engagement levels and the customer base that were made through the pandemic period [are] being maintained, which provides a strong platform for future growth," he argued.
"We expect trading conditions to be challenging in the second half. We will continue to focus on cost control and profitability, and we look forward to delivering further strategic progress over the remainder of the financial year. We remain very excited about the long-term potential of the group."
On November 30, In The Style had GBP4.4 million of net cash, plus GBP1.1 million more via an invoice facility.
In The Style shares were trading 1.6% higher at 13.59 pence each in London on Thursday afternoon. They initially jumped 12% on the news to 15.00 pence, before reversing moving 4.3% below its Wednesday close to 13.00. The company listed on AIM at 200p back in March of last year.
By Holly Beveridge; Alliance News reporter
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