Inspecs admits tough trading conditions as suitors’ deadline for offers ends today

With suitors circling, Inspecs Group talked of tough times in its latest trading update Thursday (20 November). The UK-based eyewear designer/manufacturer/distributor remains weighed down by weak consumer demand and ongoing US tariff disruptions.

Within the performance for the 10 months ended 31 October, it said the first two months of the second half of the year were now “slightly behind plan”. 

And while trading “improved in October” with its US-based eyewear company Tura recording stronger than expected sales and order books at the end of that month, 10% up on prior year, overall weakness continued.

“Notwithstanding this improved trading performance in October and our continued focus on cost savings, the ongoing US tariff disruption and continuing weak macroeconomic environment are expected to impact the timing of product shipments, in particular from [our sister manufacturer] Killine”, it said.

As a result, the group now expects to report revenue of around £191 million and underlying EBITDA of around £17.7 million for the year ending 31 December.

In the year-ago period, group revenue rose modestly to £203.3 million but fell slightly at constant exchange rates. At the time, chief exec Richard Peck noted it was still a record sales performance with an increased in the number of frames sold, “despite a slower than expected end to the year.”

Underlying EBITDA for the year-ago period was 16% ahead at £18 million.

No doubt certain rivals will be paying close attention to Inspecs’ performance with offers for the whole or part of the business having been tabled just last month.

Italian eyewear giant Safilo confirmed that it’s made a non-binding offer for the company’s German ops Eschenbach Group and BoDe.

There have also been “two separate, unsolicited proposals” from H2 Equity Partners, and a Risk Capital Partners/Ian Livingstone Consortium each setting out non-binding possible cash offers alongside the possibility of an alternative offer “including unlisted securities to acquire the entire issued and to be issued share capital of Inspecs”.

But time is running out for both H2 and the Consortium which are required to announce a “firm intention” to make an offer or to announce it doesn’t intend to do so by no later than 5pm UK time today (November 20), although the deadline could be extended.

It’s perhaps no surprise that Inspecs and parts of its business have become acquisition targets. The company, which supplies to over 80 countries and around 75,000 points of sale, is active in a buoyant part of the optical and fashion sectors and makes and markets its own eyewear brands, as well as having licenses for O’Neill, Barbour, Joseph, Radley, Superdry, Temperley, Viktor & Rolf and others.