Whispering Smith says EU business tough but UK and US shine

Fashion wholesale group Whispering Smith has filed its accounts for the year to March and managed to push some numbers upwards, despite the year clearly being a tough one for the Manchester-based business that remained loss-making.

The company is a designer, importer, exporter and wholesale distributor for major retailers, e-commerce platforms and independent outlets in the UK, Europe and beyond. 

It said the latest 12-month period saw it achieving a turnover of £39 million, up slightly from £38.2 million in the previous year. Gross profit edged up to £10.8 million from £10.4 million.

Although its sales rose, the cost of those sales also inched up and the company’s operating loss was wider at £1.56 million after a loss of £1.16 million in the previous year. The loss before tax was £1.54 million after a loss of just over £1 million the year before. The company paid more tax this time and its full year net loss was £1.17 million after a loss of just under a million in the previous year.

The sales rise came as its performance was supported by continued wholesale demand across the UK and growth in sales to the US. 

That said, performance in the EU was below expectations during the year and will be an area of strategic focus for the business in the future.

The company said that it’s key retail customers improved their obsolete inventory position this year, which provided opportunities for increased in-season stock buys compared to the previous year. While the levels were lower than in the past, this helped its wholesale activity. But the wholesale sector remains challenging, although the company is optimistic for the channel overall.

During the first half of the year its margins remained consistent due to stability in freight rates and currency exchange. But those margins were under pressure in the second half due to freight cost volatility on goods coming from China. This led to a 1% fall for the full year.

It said a successful e-commerce launch of its premium brand, Good For Nothing, into the EU was a particular highlight in the year, and its flagship brand, Brave Soul, will see its EU e-commerce business scaled up in the coming year.

The group also invested in a new B2B online portal that provides its wholesale customers with instant digital access to its product range, inventory levels and its upcoming designs in progress.

For the future, the focus continues to be strengthening relationships with its key retail partners and growing brand awareness for the two labels mentioned above internationally. It also wants to expand D2C sales channels into the US and EU and enhance its operational efficiency by reducing its supplier base by 20% to increase purchasing power and supply chain resilience. And its doubling down on sustainability and ethical sourcing initiatives.

It didn’t give a timescale for when it expects to be profitable again.