Whispering Smith, a Manchester-based fashion wholesale group, reports a decline in sales and financial losses in its annual accounts for the year ending March. The company recorded a 26% reduction in revenue, totaling £51.3 million, signaling a return to pre-pandemic turnover levels.

The company attributes its challenging performance to the evolving trading landscape, particularly its heavy reliance on e-tailer customers. The challenges faced by online retailers during the post-Covid reopening of physical stores significantly impacted Whispering Smith. This situation led to an accumulation of excess inventory among its e-tailer partners, resulting in a temporary drop in demand.

In addition to these challenges, Whispering Smith faced a substantial surge in freight costs for importing goods into the UK, leading to diminished profit margins. Furthermore, the depreciation of the US dollar exchange rate resulted in significant foreign exchange losses during the reporting period.

Consequently, the gross profit for the year declined to £8.5 million from the previous year’s £14.5 million, and the company reported an operating loss of £4.8 million, a significant swing from the £3.8 million profit recorded in the prior 12 months. The final loss for the year amounted to £4.2 million, in contrast to the previous year’s profit of £3.2 million.

Despite the challenging year, Whispering Smith remains optimistic about the future. The company anticipates a return to profitability next year, expecting improved profit margins and a return to pre-pandemic freight cost levels. Additionally, the GBP/USD foreign exchange rate is showing signs of stabilization.

Whispering Smith has taken proactive measures to bolster its business by introducing the Legacy Studios brand and acquiring the Good For Nothing label. These strategic moves are designed to complement its existing brands, such as Brave Soul and Night Addict. The company’s leadership team believes that this expanded portfolio enhances business opportunities and widens its target consumer base.

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