Rixo reports sales growth but profits are dented by store opening costs

By

Sandra Halliday

Published
January 4, 2024

Rixo has filed its results for the year to last July with the vintage-inspired womenswear brand showing sales growth almost in double digits.

The company, which was set up in 2015, will have been badly affected by the pandemic given its occasionwear focus, so the first full year without a Covid impact was clearly a period of recovery and growth for the business in which its sales rose 9.1% to reach £19 million. 

But with higher administrative expenses, particularly a one off amount of almost £536,000 linked to store openings, its operating profit and pre-tax profit fell to £2.3 million from £4.5 million a year earlier.

But it paid less tax in the latest year so this improved the figures, although its net profit for the latest period was still lower than the previous 12 months with a final figure of £1.8 million compared to £3.6 million in the prior period.

During the year it said it focused on building awareness through the opening of new stores, alongside higher investment in digital and brand marketing.

Those new stores included a flagship on London's King’s Road and a location on Carnaby Street in the West End where it was able to benefit from a high-level of international footfall. These openings incurred one-off pre-opening costs of more than half a million pounds, as mentioned above, but should be crucial sales drivers for the company.

The firm also said that the year saw its distribution cost being impacted by Brexit with costs of administration, duties and taxes affecting sales to countries in the EU and that it was working to mitigate these costs by setting up a distribution centre for EU sales in the region during the following financial period.

Other plans include a focus on building brand awareness in its key UK market while identifying international opportunities "where the business can leverage its existing brand awareness from its wholesale trading partners". 

It wants to expand its retail store portfolio by identifying key locations both within its domestic market and abroad while also driving it's e-commerce activity is through a mix of paid and organic marketing. 

Meanwhile its wholesale business will focus on its existing UK customer base and further develop international markets through a mix of localised agencies and the targeting of brand partners in key countries.