Soft furnishings retailer looks to more UK-based sourcing

Soft furnishings multi-channel retailer Julian Charles has reported a slight growth in sales while profit fell into the red.

According to its latest filed accounts for the year ended 30 April 2023, total sales rose 2% to £17.6m from £17.3m in 2022. Pre-tax losses amounted to £978,000, down from its profit of £288,000 recorded in the previous year.

Stated within its report, the company, which completed its second full year of trading under new ownership following the acquisition by SKG Capital GP Limited in June 2020, said: “The base store estate delivered significant growth on last year, with like for like sales for all stores increasing by 6%. A new store opening in Manchester and the relocation of an existing store to a larger unit in Fleetwood, Lancashire, have both proved very successful and give confidence in the retail strategy going forward.

“A wide range of macro-economic and geo-political factors have contributed to rising costs for the business over the last two years. Energy costs increased to an exceptionally high level, principally driven by the supply-side impact of the Ukraine conflict, driving up the cost of manufacturing our products and operating UK stores.

“Container shipping costs rose to 10 times their normal rate before returning to more normal levels, which, in conjunction with increased UK transport costs, eroded gross margins. Staff costs continue to increase in line with changes to the National Living Wage. Business Rates are increasing as relief is tapered down.

“Whilst trading was resilient in FY23, the business took steps to safeguard the business given the uncertainty of the UK economy. Product sourcing was switched to be more UK-based, allowing more flexibility in the timing of intake and reducing the level of cash tied up in stock on the water. Whilst this adversely impacted buying margins, strong negotiating and a reduction in discounting largely mitigated this impact.”

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