(Alliance News) - In The Style Group PLC announced on Wednesday its interim profitability had been affected by industry-wide supply chain disruptions and higher rates of returns.
Shares in In The Style were down 10% at 90.60 pence on Wednesday afternoon in London following the announcement.
For the six months ended September 30, the Manchester-based e-commerce clothing retailer reported its pretax profit had fallen 51% to GBP890,000 from GBP1.8 million in the same period the prior year.
Increased operating, distribution and administration costs also appeared to contribute to the company's hit in profitability. Operating costs increased 48% to GBP13.1 million, distribution costs increased 49% to GBP5.5 million from GBP3.7 million, and administration costs increased 48% to GBP7.7 million from GBP5.2 million.
Revenue rose 39% year-on-year to GBP29.8 million from GBP21.5 million. In The Style said this was "pleasing growth" and had exceeded initial expectations. The company cited increase website traffic, customer conversion, average order value and customer order frequency for the rise.
Looking forward, In The Style said it would continue to actively manage the external challenges of supply chain disruption and increased associated costs as far as is possible. It said that detailed plans are in place to mitigate the longer-term cost impact of these external headwinds through both sourcing and product pricing initiatives.
In addition, In The Style said it would take actions to improve the returns rate, including improving the fitting process, and said it was confident of achieving a lower underlying returns rate over the medium term.
In The Style did not declare an interim dividend.
By Heather Rydings; heatherrydings@alliancenews.com
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