Seasalt, the fast-growing Cornish fashion brand, provides an update on its recent trading, including the Christmas period.
Celebrating its 40th anniversary this year, Seasalt operates online, through stores across the UK and Ireland, with international marketplace partners such as Zalando and via wholesale partners across a number of international markets.
For the five-week period ended 2 January 2021, overall sales increased by 17% compared with the same period last year, with a 44% fall in store sales more than compensated for by a 95% rise in online trade. International sales increased by 20% in the same period.
Trading performance for the financial year ending 30 January 2021
The Covid-19 crisis has caused severe disruption to trading in Seasalt’s store estate and will continue to do so for at least the early part of 2021. Following the various lockdowns, store sales for the year ended 30 January 2021 are expected to be approximately 57% lower than those of the year ended 1 February 2020. That reduction clearly has a significant impact on the profitability of the store estate, which forms the basis of our ongoing discussions with landlords, who are mostly being very supportive partners.
However, online sales have grown well above expectations, with customers responding to a mixture of brand content, Cornwall-inspired activities and positive messaging. Current expectations for the year ended 30 January 2021 are for online sales to have increased by 72% year on year, reflecting high demand for Seasalt’s relaxed style of clothing as customers adapted to spending more time at home.
Overall, across all sales channels, sales are expected to be only 9% down year on year.
Highlights for the current financial year, ending 30 January 2021:
- Digital channels now account for 67% of sales and are expected to remain the dominant channel after stores reopen.
- Customers adapt to working from home with sales of women’s socks, slippers and trousers more than doubling.
- Virtual and in-store (when permitted) appointments launched, providing customers with a personalised experienced in a safe and comfortable environment.
- Partnerships with Zalando and eBay demonstrate our multichannel approach and have assisted in new customer acquisition.
Financial results for the financial year ended 1 February 2020
Seasalt is today publishing its results for the financial year ending 1st February 2020. In another year of growth for the brand, Seasalt saw a strong increase in turnover and a solid profit return.
Highlights for the financial year ended 1 February 2020:
- Turnover of £75.4m, an increase of 15% on the prior year and the 11th successive year of 15%+ sales growth.
- Operating profit of £1.0m and profit before tax of £0.7m – level-year-on year after adjusting for unrealised foreign currency movements.
- Underlying EBITDA of £4.4m. Gross profit margin of 55%.
Paul Hayes, Seasalt CEO, said: “Staying close to our customers, being able to understand their needs and never forgetting our Cornish roots has helped us deliver this strong performance and allowed us to adapt at pace during the pandemic.”
“We had started our digital transformation well before the first lockdown, but the events of the past year have accelerated all our plans. We now make approximately two-thirds of our sales online and while our stores remain a vital and constantly-evolving part of the business, we expect a much higher percentage of sales to be digital from now on.
“As we begin our 40th anniversary year, we have taken the steps necessary to prepare Seasalt for the challenges ahead and we are well positioned for continued success as the economy recovers.”
Malcolm Macdonald, Seasalt CFO, said: “I am pleased to say momentum from a strong set of financial results last year carried on into the new financial year and through Christmas.
“By being available to customers where and when they want to shop, Seasalt has been able to continue to trade successfully through a period of enormous uncertainty in the retail sector.”