Turnover down at Robert Dyas; Paphitis warns of a 'perfect storm' in retail

British retail tycoon, Theo Paphitis - who owns the Robert Dyas, Ryman and Boux Avenue chains - has warned of a 'perfect storm' in the retail sector.

In a trading update for the year ended 26th March 2016, Paphitis said:

"Firstly, I am delighted that each of our individual brands and the group as a whole were able to deliver growth in like for like sales at this crucial time for retail. Once again, we observed the further shift of our customers to purchasing online with growth in this channel across the group being over 50% ahead of last year. Like last year, we saw multiple peaks, with Black Friday being a key event in the UK retail calendar. Retail is facing many challenges, particularly with a decline in footfall on many high streets, but at the same time we see opportunities that come with the continued development of technology that makes shopping as convenient for customers as it has ever been. We will continue to invest in this area to ensure that our much loved brands interact with customers in ways that suits them best.

"I have never known a more dynamic time for retail. Working with heritage brands, Ryman and Robert Dyas that have both been around for over a century, the pace of change is more challenging and opportunistic than ever. Having started the Boux Avenue business only 5 years ago, even in this relatively short space of retail history, we have seen our business plan adjusted to take into account the momentous changes in shoppers’ habits.

"Retail, especially within bricks and mortar in the UK, is facing the perfect storm. As mentioned above, changes in consumer habits, the impact of the weaker pound against the dollar and euro, coupled with increasing labour costs, the apprenticeship levy and the sucker punch in the lack of an honest and equitable reform of what is an archaic system of business rates.

"With regard to the so-called recent business rates reform, retail has changed dramatically over the years but is faced with a tax that was introduced in a different world. The facts are that footfall and activity on our high streets and town centres are in decline but businesses like ours are about to see an overall increase instead of a decrease in their rates bill in the next 12 months.

"We have invested significantly in the last 2 years building and modernising our infrastructure, in particular commissioning a new warehouse and distribution facility in Hemel Hempstead and new websites for Ryman and Robert Dyas to meet the changing needs of today’s consumer. Boux Avenue will be moving to a new e-commerce platform this quarter.”

Robert Dyas

Turnover decreased 4.4% from £125.5m in 2015 to £120.0m, with like for like sales reducing by 4.7%.

Underlying EBITDA reduced from £7.0m in 2015 to £1.5m.

Paphitis said:

"A challenging year with a change of management team, together with continuing investment in commissioning a new warehouse and logistics centre in Hemel Hempstead. Technology introduced simultaneously to enable future growth in e-commerce as well as stores. This unfortunately resulted in disruption to our supply chain and business in general, impacting our financial performance in the short term. The warehouse is now fully settled and costs running to expectations, helping drive strong growth in particularly e-commerce as seen over the Christmas trading period."

Image: TheoPaphitis.com 

Source : Theo Paphitis
www.theopaphitis.com 

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