A major restructuring at luxury fashion and footwear brand END. saw the business swing to a loss in a challenging retail landscape, accounts show.
END. was launched in 2005 from a small shop in Newcastle鈥檚 High Bridge Street and soon garnered a faithful following for bringing rare trainer brands to Tyneside. The firm has since expanded into a new flagship store in Newcastle, while also operating additional stores in Glasgow, London, Manchester and Milan.
Its founders Christiaan Ashworth and John Parker left the group ahead of its acquisition by new owners Apollo Global Management. It鈥檚 not known how much the company was acquired for last October but, before its acquisition, accounts outline how the directors considered current macroeconomic conditions and carried out an impairment assessment, 鈥渢o assess the realisable value of the company鈥檚 investment鈥 鈥 resulting in an impairment charge of 拢778m. The impairment charge contributed to an operating loss of 拢665.5m.
The firm said: 鈥淭he primary cause of this impairment stems from the macroeconomic conditions.鈥 A report with results filed under Lobster Bidco Ltd, covering the year ended 31 March 2024, show revenue dropped 2.1% to 拢215.3m.
Directors cited the challenging retail sector for its drop in sales, but it delivered positive pre-exceptional Ebitda of 拢6.2m, down from 拢27.7m, thanks to promotions to help clear its stock levels and 鈥渟everal strategic changes and investments aimed at increasing operational efficiency and bolstering future growth initiatives鈥.
However, a rightsizing of the company鈥檚 warehouse operations and the closure of its Grainger Street store in Newcastle led to an overall Ebitda loss of 拢16.5m, down from profit of 拢12.4m. Its inventory value at the end of year was 拢64.4m, a significant improvement on the previous year鈥檚 拢94.2m, and directors said they have invested and created jobs in key departments in the period, to support growth and to further develop the business for continued success.
The report said: 鈥淒uring the financial year ended 31st March 2024, the retail landscape remained challenging as macroeconomic pressures persisted both in the 海角视频 and abroad. High inflation and elevated interest rates weighed heavily on consumer spending.
鈥淭argeted action was taken to reduce the overall stockholding and enable the consolidation of two warehouse facilities into a single location to right size the operations. Whilst there was restructuring in the year, the directors ensure that any redundancies were kept to a minimum.
鈥淲here possible, employees were provided with alternative roles that suit their skills and needs whilst continuing to support their development.鈥
Following publication of the accounts, a spokesperson said: 鈥2023 was an important year for END. as we accelerated our transformation following the implementation of our new warehouse management system and introduced new merchandising capabilities to rationalise and optimise inventory to reflect the post-Covid trading conditions.
鈥淲e have now fully integrated the new WMS and are seeing significant efficiencies and improved service levels. Inventory is now at very healthy levels and we are focusing fully on new season trading for SS25. Recent goodwill accounting adjustments reflect the current state of the market; however, the company鈥檚 underlying health remains robust.
鈥淲ith a deleveraged balance sheet, we are well-poised to navigate the current market environment, execute our strategic business plans and ensure the company remains positioned for sustained success.
鈥淎s we approach our 20th anniversary, we remain confident in the long-term opportunity for END. and our differentiated position at the intersection of luxury, streetwear, and contemporary markets.鈥
