As Fat Face Limited gears up for its acquisition by Next, the company reflects on a remarkable year. In their latest annual accounts, covering the 12 months ending in May, the brand has labeled it an «exceptional year.»
The company, renowned for its FatFace brand, achieved record-breaking sales, surpassing their own expectations for store performance. Additionally, their digital sales, including those through partners, continued their upward trajectory.
Despite challenging economic conditions, Fat Face, a B Corp certified lifestyle brand, reported a significant boost in revenue, reaching £270.9 million compared to the previous year’s £234.9 million.
Operating profit, before considering interest, tax, depreciation, amortization, and impairment, saw a remarkable increase, soaring to £20.2 million from £8.9 million. While this surge reflects improved trade, it’s essential to note that it also signifies a reduction in profit margins due to input price pressures and inflation.
Moreover, the company benefited from reduced fixed asset impairments and a change in the group’s transfer pricing policy, leading to a lower royalty charge for the year. These factors contributed to an impressive rise in post-tax profit, which reached £15.4 million, compared to the previous year’s £5.2 million.
The growth in digital sales is particularly significant, aligning with Fat Face’s strategy to transform into a digital-first business with a target mix of at least 60%. In the last year, digital revenue accounted for 39.5% of the total, supported by 42.8 million website visits, an increase from the previous year’s 38.8%.
Fat Face remains committed to enhancing the online experience, boosting digital self-service, and improving delivery and fulfillment solutions. The company also aims for further expansion through partnerships with third-party digital retailers, a direction that gains significance with the upcoming acquisition by Next, which intends to transition to the Next Total Platform within 12 months. Additionally, Fat Face is working on enhancing the user journey with a strong mobile-first focus.
However, the company is not neglecting its physical presence. While evolving into a digital-first entity, Fat Face retains its status as an omnichannel retailer, maintaining a robust focus on its physical retail spaces. Currently, its UK stores represent the largest part of its business, with 180 stores, a slight reduction from the 193 stores a year earlier, as the brand concentrates on optimizing its presence in the most profitable locations.