FatFace profits dip despite sales rise

The lifestyle retailer’s EBITDA dipped from £33.5m to £29.7m, although on a constant currency basis it was up 0.9%

Total sales rose from £220.7m to £226.1m in the 53 weeks to June 3, 2017.

FatFace made its biggest ever investment last year, ploughing £9.5m into a new distribution centre and expanding channels and trading partners.

Boss Anthony Thompson told Retail Week that while this investment affected its bottom line, the business was also hit by an uncertain economic environment and currency headwinds.

”There’s no question that investment choices we made have cost us some EBITDA but the first quarter of the year also included the Brexit result,” he said. ”We saw an immediate impact in that quarter on sales levels for six to eight weeks afterwards.

“And we source the majority of our clothes in dollars so experienced those headwinds. But those have now cleared and we are annualising on that now.”

FatFace opened 10 new stores during the year, adding 4% to its total square footage.

That expansion included doubling its store numbers in the US from three to six and signing its first US department store partnership with Von Maur.

FatFace added that the US business was “trading well” but declined to give numbers.

Thompson said that American consumers were responding “very positively” to the brand.

“We may speed up the pace of our expansion in the US,” he said. “By the end of this financial year in May, we should have three to four more stores there.”