Adena’s results dip in tough year, but firm is upbeat on Accessorize, Monsoon prospects

Monsoon may have been on the comeback trail post-pandemic but its latest year was a tough one (as it was for much of the fashion sector), its parent’s results have shown.

Adena Brands, which owns Monsoon and the Accessorize chain (as well as the smaller East), saw sales falling 4% to £248 million in the year to late August 2023, with EBITDA down by £4.4 million to £20 million. Retail like-for-like sales rose 4% with Accessorize the top performer (its UK retail sales rose 11%). Despite Monsoon trailing its stablemate, its core digital womenswear sales rose 6% and were 52% higher than the pre-pandemic period. Its core growth was also offset by weaker sales in the group’s international markets and in Monsoon Childrenswear.

Despite some difficulties leading up to and during the pandemic that meant the former Monsoon Accessorise went into administration, it came out of that period strongly. But the cost-of-living crisis, online sales shrinking back to a more ‘normal’ level post-Covid, cost inflation (caused by wage rises, business rates and higher energy prices) and the chilly summer of 2023 all conspired to create the harsh trading conditions last year. 

Yet the company’s restructuring has positioned it for a stronger future and it has been investing in product improvements and its tech platform.

It’s also been investing in store openings. The business had around 230 stores before its administration and has around 150 now, with several key openings last year. One of those was a travel boutique in London’s Waterloo Station and among its opening plans now are its first airport stores. 

It’s planning 20 new stores in the UK and is continuing to open in Europe with the firm eyeing growth in Italy, its biggest EU market. Looking forward, Monsoon’s focus is also on building on the success of its elevated Women’s product and launching a refreshed line of kidswear. Accessorize will continue to build on its successful core categories as well as test an expanded product offering. 

CEO Nick Stowe said: “Over the past year, we faced an increasingly difficult trading landscape that has persisted into the current financial period. However, our recent restructuring has positioned us well and we have continued to invest, resulting in better product, expanded distribution, and a much-improved technology platform compared to a year ago.

“Our Monsoon women’s line has taken another major step forward. Accessorize’s focus on its core product and a never-out-of-stock programme has yielded strong results. New store performance has been robust, and we are testing multiple Monsoon and Accessorize formats, part of our commitment to growing our retail. 

“In our digital business, our marketing efficiency is improving, we are revamping our loyalty program, and extending our third-party marketplace presence.

“Our international business is evolving positively, particularly with growth in our European stores and with a successful franchise transition in Saudi Arabia. And behind the scenes we have seamlessly implemented a major ERP system transition, updating our technology platform and reducing risk.

“Despite ongoing retail challenges entering Spring-Summer 2024, we are seeing early signs of improvement: certain product categories are rebounding, cost inflation is stabilising, and shipping disruptions are easing.”

Peter Simon, founder and Chairman, added: “While… we are confident about the opportunities ahead of us, we remain cautious about the near-term trading environment. With the impact of inflation still lingering, interest rates stubbornly high, and consumer confidence only improving slowly, we anticipate that real demand growth will only return later in 2024.

“The restructuring work over the past few years continues to pay benefits and the initiatives we have pursed are yielding results, enabling us to weather the current environment. We remain committed to our strategy and are continuing to invest in our product, distribution channels, and technology so that we are in an even better position when growth returns.”