The Entertainer posts sales boost but ‘remains cautious’

The toys and games retailer increased turnover year on year by £19.4m to £220.7m for the year ending January 28, 2023. 

Gross profit, the retailer’s key performance indicator, increased by £4.4m to £116.6m, but pre-tax profit dropped from £22.5m to £7.6m owing to the impact of inflation and the ongoing war in Ukraine. 

Europe sales declined 76.2% and rest-of-world sales fell 37.8% against the previous period.

The results mark the family-owned business’ second consecutive year of growth, following a decline of 18.3% in UK sales for FY2020. 

According to GlobalData, The Entertainer’s latest UK sales growth of 16.2% has outperformed the toys and games sector. It put this down to the retailer’s expansion of lower-price-point products, reactive strategy improvements in its omnichannel offering and investment in improving ecommerce capabilities, with express 30-minute-collection options in partnership with Asda and its ‘Present Finder’ tool to improve up-sell capability and rapid fulfilment options.

In a statement, the retailer said it was “prepared for another difficult year ahead” as its customers faced the challenge of inflation and it “remained cautious about the short-term outlook” of the business, but maintained it was in a strong position to prosper long term. 

“Having planned for a post-pandemic recovery, the impact of both the Ukraine war and the cost-of-living crisis has a clear impact on customer demand, particularly in the second half of the year into the peak Christmas period, as well as the resulting inflationary pressures driving up costs within the business.

“The past three years have been challenging for our customers, colleagues and partners. Prolonged periods of store closures, inflated freight costs, supply chain disruption and now record levels of inflation. During this financial year, as customers have started to resume a more normal way of life, the business has seen a return to stores and a more balanced mix of channel sales.

“Store sales were up significantly on the prior year, distorted by the 10-week store closure period at the start of 2021, as sales returned to pre-pandemic levels. Whilst online sales dropped back on last year, they remained significantly higher than before the pandemic. 

“The business is very focused on its business priorities. It continues to focus on its product ranges, manage its costs and upgrade its customer service, while also developing new business opportunities.

“The business will continue to strengthen its foundations as it invests in its digital experience, its employee development and its core systems and processes to ensure efficiencies and best practice for future growth.”

The Entertainer closed the year with 171 stores, flat on the previous period, while its employee numbers dropped by 23 to 1,795.