In The Style earnings fall amid ‘higher than anticipated’ return rates

The online fashion retailer said pre-tax profit slumped 52% to £890,000 in the six months to September 30, despite a 39% surge in revenue to £29.8m. Direct-to-consumer sales jumped 24% to £23m during the period.

In The Style’s wholesale revenue rocketed 139% to £6.9m as partnerships with third-party retailers, including a 100-store shop-in-shop deal with Asda, bore fruit.

Average order value jumped 26%, as website visits rose 7.6% year on year. Almost two thirds of the company’s total orders now come from its smartphone app.

The etailer attributed its decline in profits to ongoing supply chain disruption, as well as a higher return rate compared with the year before.

In The Style said returns had increased following a “swing in customer demand towards occasionwear and away from the less ‘fit sensitive’ casual ranges”, such as jogging bottoms and hoodies, that had spurred spending during national lockdowns.

Returns were also impacted by growth in sales of In The Style’s “more inclusive size ranges”, categories in which “product fit is paramount”.

In The Style said it was already taking actions to improve return rates, including “improving the fitting process”.

The retailer said returns had “reduced in line with expectations” since the start of its second half and insisted it was “confident of achieving a lower underlying returns rate over the medium term”.

Chief executive Adam Frisby, who is stepping into the role of chief brand officer next month to be replaced at the helm by former Very Group executive Sam Perkins, said: “While the global supply chain and freight disruption that has impacted across the industry is expected to persist for at least the remainder of the year, we are pleased to report that the strong sales performance achieved during the first half has continued through Black Friday and into the festive trading period so far.

“With this momentum, coupled with recent investment into our scaled-up operational and senior management teams, we look forward to continuing In The Style’s exciting growth and achieving our long-term vision for the brand.”