TPRG Financial Year End 2020: Resilient retail performance and investment
Theo Paphitis Retail Group (“The Group”)
Financial Year End 2020 Results
Resilient retail performance and investment as Paphitis looks ahead
FY20 Summary
Ryman: Solid profit performance from Ryman once again, with total revenue at £123.4m, delivering an EBITDA of £7.8m in line with FY19.
Robert Dyas: Increase in sales by 2.7% on the previous year, with significant investment into growing ecommerce. This strategic investment drove ecommerce growth to 20% of sales in the year and is now close to 50%. The investment in infrastructure and sales contributed to an EBITDA loss of £3.1m (FY19 profit £1.8m).
Boux Avenue: Progress with the strategic review and plan started in January 2020 is significantly ahead of expectations. Financial performance for FY20, which represents the period before new plans were implemented, was an EBITDA loss of £14.9m.
These figures relate to a historic period which included only one week of the first lockdown and will shortly be superseded by our latest financial statements for the year ended 27th March 2021.
Theo Paphitis, Chairman Ryman, Robert Dyas, Boux Avenue and London Graphic Centre said:
“As I stated publicly last May, the last 12 months have seen the acceleration of an online retail shift by at least 5 years, and this is something I don’t see changing now; consumer behaviour has flipped. Investments we have made prior to, and throughout the pandemic, have been essential for our businesses. Having a diverse retail portfolio, each of my brands has responded robustly, and in different ways, to the consumer demand through focusing on the right products, and emphasis on our online propositions. The continued investment in our online business has allowed us to build momentum going forward and be cautiously optimistic as we look ahead.
When the stores reopen on April 12th, we will once again see how important community retailing is to us all, especially where people are still working from home all or some of the week, seeking out their local retail stores. There is more of a question mark over demand in big city centres, and I believe we need a settling in period to assess demand and footfall, and this will take 12-16 weeks at least, with all eyes also on June 21st, when all restrictions are due to be relaxed.
The last year has underlined just how integral relationships are to survival of the fittest, and the spirit of our colleagues has highlighted increased reliance on distribution centres and their teams, the previously unsung heroes, who have kept the show on the road throughout. Our suppliers and stakeholders have been more important than ever, and have also worked closely with us as recognising the value of our brands through collaboration.
Ryman strengthened its ecommerce focus, resulting in growth, and the brand shifted attention to responding to the demand in working from home and homeschooling, in particular through the furniture, ink and print categories. I, and our colleagues, are looking forward to reopening the stores on the 12th April, and importantly look towards people returning to work and universities, for the Ryman business. We have also seen an increased demand for arts and crafting in Ryman’s sister brand, London Graphic Centre.
Robert Dyas saw an increase in sales in the last financial year, and the ecommerce proposition investment, prior to the pandemic, is paying dividends; at 20% of the business previously, this has accelerated to almost 50% of the business, as I predicted last April. Services also continue to perform well, and we have rolled out 4 more joint Ryman/Robert Dyas stores in Orpington, Sevenoaks, Eastleigh and Haywards Heath following the success of this concept.
Home and garden has been a strong focus for the brand, with robust sales across most related categories. The lack of a holiday hasn’t stopped Robert Dyas customers from recreating one at home, with many even investing in a hot tub for the garden and a standalone infrared sauna for the spare room, another category that has seen a sharp rise in the last 12 months.
Following the announcement of my decision to undertake a strategic review of Boux Avenue at the beginning of January 2020, at the time of which, the figures for the year we are reporting were pretty well known, I’m delighted to say it has been constructive and positive on many levels. Boux’s product range, newly placed strategic team and overall strategy see Boux Avenue in a substantially better position now, than our expectations at the beginning of the year. The response by customers to our ranges drove particular success in loungewear, nightwear and lingerie with significant growth online during lockdown.
The further accelerated shift of our Boux Avenue customer to online invites us to continue to adapt our model through the work of this new team, including a renewed marketing and influencer focus, resulting in a stronger trading performance and brand exposure. This gives me many further reasons to be optimistic about building momentum for Boux Avenue.
External influences are less within our control, but just as crucial as our internal strategies, and over the last year, we have engaged with landlords on a productive basis, as stakeholders, and this has been helpful in realigning costs to a more sustainable level overall. The profile of our store leases with most expiring in the next 18 months allows us to continually review the position and maintain what is an important channel for our brand and colleagues.
Finally, and perhaps more importantly for physical retail, is that we must build on all the support that the Government has given to businesses over the pandemic. The Chancellor must recognise that if business rates, or as I call it, the ‘business destroyer’, returns, it will have a catastrophic effect on physical retail and it will be Goodnight Vienna. Where there is a realignment in costs in this area, then there is a positive future for stores. Re-addressing business rates has the power to help build retail up again, or indeed destroy it. Retail is watching.”
Ends