Despite announcing record sales for its latest financial year, Gymshark has placed nearly 300 jobs in jeopardy.
The Solihull-based firm, co-founded by self-made billionaire Ben Francis, has initiated a consultation process with 296 staff members, which constitutes almost a third of its total workforce, as reported by .
This development was first reported by Drapers on the same day that Gymshark disclosed its revenue had crossed the £600m threshold for the first time.
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The fitness apparel company registered sales of £607.3m for the year ending 31 July, 2024, marking an increase from the £556.2m it posted in the previous 12 months.
This surge in revenue signifies the company's 12th consecutive year of sales growth.
Addressing the proposed job cuts, a spokesperson for Gymshark stated: "We can confirm we have proposed a business restructure, which will place approximately 296 roles at risk of redundancy."
However, they added, "However, at the same time, we will be creating 168 new roles to help drive our future growth.
"Our immediate priority is to help and support those at risk through this process, while seeking to offer as many of them as possible these new roles."
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The spokesperson further explained, "We find ourselves in a time of intense macro-economic volatility. We, like so many others in the retail sector, need to be set up not only to weather these near-term storms, but also to build and grow in the future."
"We have therefore carefully reviewed our operating model and organisational structure to ensure we have the right teams and roles to support these goals."
Gymshark's profits dip for third consecutive year
Despite a surge in sales, Gymshark's pre-tax profit has declined for the third successive year. The fitness brand's pre-tax profit fell for the first time in the year ending July 2022, dropping from £27.8m to £13m in the 12 months to July 2023.
The company's most recent accounts reveal that its pre-tax profit has further decreased to £11.8m.
Over the past year, the firm's workforce grew from 853 to 881 – a number that is now expected to be significantly reduced.
Gymshark was established by Ben Francis and Lewis Morgan in 2012. In 2020, it achieved a valuation of over £1bn when US private equity firm General Atlantic purchased a 21% stake.
Commenting on the latest results, CEO Ben Francis stated: "Despite well-reported economic turbulence, FY24 represented another strong year of growth for Gymshark.
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"We broke the £600m barrier for the first time, and adjusted EBITDA rose by double-digit numbers.
"Looking to the future, it's no secret that the retail sector is feeling the strain from macro-economic pressures."
"As such, we are ensuring we have a heightened focus on controlling our expenditure, so we are best set up to become a fully omnichannel business and realise our dream of becoming a 100-year brand continuing to make the best gym products for our consumers."