In The Style slides after profit warning

(Sharecast News) - In The Style shares sank on Friday after the fashion brand warned that higher freight costs, disruption to the timing of shipments and increased customer returns were set to dent profits.
The company said it has not been immune to the impact of widely-documented freight and supply chain disruption in recent months.

"Whilst the group has sought to utilise the most efficient channels wherever possible to ship product, increased freight costs and disruption to the timing of shipments are expected to remain for at least the remainder of the current financial year which, in combination with the increased returns rate in the period, will impact the group's profitability."

In an update on trading from April to August, In The Style said revenue grew 45% on the year and e-commerce gross order value was up 50%. This was driven by the increasing profile and awareness of its "differentiated brand"; the continued expansion of its influencer collaboration model; and increased customer demand due to the return of social events over the summer.

App sales rose to 62% of total e-commerce sales from 53% in the same period a year ago. "The group's new strategic wholesale partnerships, including the successful launch in 100 ASDA stores in May, supported good levels of customer engagement and resulted in wholesale sales significantly increasing by in excess of 200% year-on-year," it said.

In The Style highlighted a shift in demand towards occasion wear, which typically carries a higher returns rate than the leisurewear that dominated the sales mix in the previous year.

"In addition, the faster-than -anticipated progress on growing sales of the group's more inclusive size ranges has resulted in an increase in the rate of returns," it said. "As a result, net e-commerce sales for the period (excluding VAT and post returns) were 25% ahead of the prior year."

Founder and chief executive officer Adam Frisby said: "We are pleased with the strong sales momentum achieved during the financial year to date. This momentum has been supported by increasing consumer awareness of In The Style and our clear brand mission to empower customers to be brave, embrace body confidence and, most of all, love themselves for who they are.

"Central to our growth is our differentiated influencer collaboration model that creates strong customer connections, drives efficient customer acquisition, and gives us exposure to a broad range of customers. During the period we continued to add exciting new influencer partnerships as well as launching a number of successful collections."

At 0850 BST, the shares were down 11% at 174p.