Retailer Jack Wills is back in the black, after weathering a "tough consumer environment", and focusing on slashing discounting.
The group made an operating profit of £730,000 in the year to January, compared to a loss of £13.8m the year before. The firm said it had absorbed £1.7m of costs associated with the BlueGem acquisition. Sales rose four per cent to £142.4m from £137.4m last year.
The company had previously been suffering due to problems with the outsourcing of its distribution centre, with co-founder Peter Williams returning in 2015 to take the helm. He teamed up with private equity firm BlueGem Capital Partners, which owns London department store Liberty, as part of a multi-million pound buyout of the preppy clothing empire in October last year.
Jack Wills said profit transformation had continued into 2017/18 thanks to ongoing efficiency programmes.
The retailer has been ramping up expansion plans of late, announcing in May the opening of its first store in Germany.
Jack Wills secured £10m in funding for its international expansion over a year ago, when HSBC decided to increase its credit facility to the retailer to £30m. Now, Jack Wills has 90 shops across the world.
Peter Williams, founder and chief executive of Jack Wills, said:
Momentum has very much returned to the business and this is evident from the overall improvement in, and return to, profitability.
This momentum of profit improvement is continuing through the current financial year, helped by our efficiency programmes and our deliberate strategy to reduce promotional activity, which improved margin.
Despite the tough consumer environment and focus on reducing promotions, revenue is up four per cent with our multichannel model giving customers ultimate flexibility on how and where they engage with the brand. We are strengthening and growing our presence in the UK and overseas and today ship to a record 130 countries worldwide. We are working on a number of exciting initiatives and will open an additional 10 stores this year.