Lingerie Retailer Battles Brexit Impact on Sourcing Costs

  • Ann Summers appoints property adviser due to £3.3m loss
  • Rising store costs and Brexit impact on sourcing costs blamed for financial struggles
  • CVA consideration for 106 stores possible
  • CEO Jacqueline Gold cites business rates, employment costs as additional burdens
  • Investment in new brand look and high sourcing costs cited as challenges

Ann Summers, the lingerie retailer, has appointed a property adviser to help with rent reductions after suffering a £3.3 million loss in 2018, compared to a £2.9 million profit in 2017. The company blames rising store costs and the fall of sterling due to Brexit for the decline, which has increased sourcing costs. Reports suggest that CWM was hired to help Ann Summers consider options for its 106 stores, including a potential Company Voluntary Arrangement (CVA). Jacqueline Gold, CEO of Ann Summers, which employs 1,250 people, said the retailer faced a ‘difficult year’ in 2018 due to investment in a new brand look, business taxes, and high sourcing costs. She added that the devaluation of sterling following the Brexit vote had eroded profit by £1.5 million. In a notice to the retailers’ accounts, Gold stated: ‘As with all retailers, we face the disproportionate burden of business rates on our stores… unlike the pure-play brands and online giants whose competitive advantage remains unchallenged.’ Employment costs have increased by £0.5 million due to the ‘national living wage’, pension contribution ratchets, and the apprenticeship levy. An Ann Summers spokesperson said: ‘As a leading retailer operating in the current retail climate, we are constantly striving to secure the most cost-effective and responsible ways of working, including working with a property agent on our existing portfolio and new sites.’

Factuality Level: 8
Factuality Justification: The article provides accurate information about Ann Summers’ financial situation and reasons for seeking rent reductions, including Brexit-related issues and rising costs. It also includes quotes from the CEO and a spokesperson, making it a reliable source of information.
Noise Level: 3
Noise Justification: The article provides relevant information about Ann Summers’ financial situation and the factors affecting its performance, such as rising costs and Brexit. It also includes quotes from the CEO and a spokesperson. However, it could benefit from more in-depth analysis of the broader retail climate and potential solutions beyond rent reductions.
Financial Relevance: Yes
Financial Markets Impacted: Ann Summers, retail industry
Financial Rating Justification: The article discusses financial losses and cost challenges faced by Ann Summers, a retail company, which impacts its business operations and potentially affects the retail industry as a whole.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk