In The Style entices new customers with influencer partnerships as it posts pre-tax loss
Digital fashion retailer In The Style has seen its share price slump after posting a pre-tax loss in its debut full-year results as a public firm.
Shares were down more than 35 per cent on Tuesday afternoon after CEO Sam Perkins admitted the year ahead would likely be “a challenging one for consumers and retailers.”
The e-commerce brand posted a pre-tax loss of £1.5m for the year to 31 March, versus a pre-tax profit of some £125,000 the prior year.
“We are taking actions to respond including prudent cost control, cash management and executing against our refined growth strategy,” Perkins added.
Group sales surged 28 per cent to £57.3m, compared to £44.7m in the previous year, buoyed by partnerships with 27 influencers.
The brand launched 193 “collaboration collections,” with influencers including Gemma Atkinson and Stacey Solomon.
Total orders surpassed 1.5m for the year, up 13 per cent, with In The Style’s active customer base swelling four per cent to 677,000.
Fashion-lovers also spent more when ordering from the site, with the average order value increasing 21 per cent to £52, versus £42.85 last year.
“The combination of our authentic inclusive brand, our differentiated influencer collaboration model, our agile supply chain and our well invested technology platform provides us with a competitive edge that can be further leveraged,” the company said in its outlook section.
Group revenue was anticipated to be “broadly flat” with direct-to-consumer revenue growing “at mid-single digit rates.”
However, the retailer warned that revenue from its wholesale channel was expected to decline “at a double-digit rate” while the company focuses on its digital partners.
While direct-to-consumer gross margin would reduce, wholesale gross margin was anticipated to return to 2021 levels.·
The group forecast an adjusted EBITDA loss for the year of £2m, given the “very uncertain market conditions.”
It comes as fast fashion firms have been grappling with weakening consumer confidence amid supply chain disruption and elevated costs.
Just last week rival Boohoo introduced a return fee for online parcels, citing increased shipping costs as the reason.