Coast, Warehouse and Oasis hit by falling profits after £100m sale abandoned

 
Helen Cahill
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The owner of the three brands sought £100m from a sale (Source: Oasis website)

Profits have fallen at Oasis and Warehouse - the two of the chains in the Aurora Fashions group - weeks after the owner of the brands called off a sale.

Icelandic bank Kaupthing was looking for £100m in a sale of the trio of middle-market retailers. However, last month it ditched its sale plans.

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Sales at Oasis grew 1.3 per cent, up from £149m to £151m for the period between 28 February 2016 and 25 February 2017.

However, profit after tax for the year fell from £6.1m to £2.9m, a drop of 52 per cent.

Warehouse made a pre-tax loss of £12.3m, which comes on the back of a £1.1m loss the prior year. Turnover came in at £106m, down 13 per cent from £124m the year before.

Coast, which is in the final year of a three-year turnaround plan, said it had successfully completed its turnaround, having returned to profit in 2016 and putting in its best performance for five years. Profits for the financial year grew from £1.4m to £2.9m.

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In its strategic statement, Coast said: "The business continued to maintain a tight, disciplined control of its cost base with further exits from loss-making stores.

"A good year of sales performance together with significant margin improvement and strong wholesale and franchise growth now gives Coast a very solid base from which to drive forward."

The business said it now plans to devise a three-year programme of refurbishments for its stores and concessions. Meanwhile, it intends to drive up the share of sales made online, which it hopes will account for 40 per cent of sales in three years.

However, the board of the retail chain warned that the sector faced political and economic uncertainty in the year ahead due to the EU referendum and the Conservatives' snap general election.

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"The main risk to the group is currency risk and a potential drop in consumer confidence," the directors said in the report.

"The group will continue to minimise its currency risk and adjust plans accordingly."

Over the period, Oasis opened stores in London, Chelmsford, St Albans and Farnham, and refurbished five other outlets. The business also closed three loss-making stores.

In its strategic report Oasis said it was continuing to invest in its digital presence, and was intending to expand its store portfolio in the year ahead. The chain is aiming to open "local" store formats in market towns, and has identified 30 possible locations for such stores in the year ahead.

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