Monsoon posts £4m loss after a stormy year

Kasmira Jefford
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MONSOON Accessorize swung to a £4m loss last year after what the retailer’s founder Peter Simon described as “the most difficult” trading period in its 40-year history.

The folk-inspired fashion and accessories group, which has more than 1,000 stores in 74 countries, said sales fell 12 per cent to £529m in the year to 25 August 2012, blaming tough trading conditions across its markets.

“Like most other fashion retailers, we saw a sharp decline in sales throughout the year, caused largely by the deteriorating economic environment in the UK and the wider world,” Simon said.

The business made a £4m operating loss against an operating profit of £60.1m in the previous year, while underlying earnings fell 59 per cent to £46.9m.

Simon said the company has since taken “far-reaching actions” to strengthen the business and that underlying earnings were up 20 per cent since the start of its current financial year thanks to the retailer’s decision not to discount products at Christmas.

In February, it hired John Browett, the former boss of electricals group Dixons Retail who had a brief stint as Apple’s global head of retail before being abruptly forced out six months ago.

Simon opened the first Monsoon shop in 1973 in Knightsbridge after selling items on the Portobello Road in London’s Notting Hill. He then launched Accessorize 10 years later in 1984 in Covent Garden.

The group floated on the stock market in 1999 but was taken private again by Simon in 2007 in a £755m deal after sales began to slide.

Despite posting a loss, the group has maintained a strong balance sheet and generated £45.2m in cash last year.

Its parent company Drillgreat has paid off borrowings of more than £200m since the management buy-out in 2007. No dividend has been paid to Drillgreat.

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