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In The Style shares drop more than 20% following profits warning

Tom Shearsmith
23 January 2023

In The Style, the influencer-led womenswear brand, saw its shares plunge by 21.25% today following a profits warning on Friday.

The Manchester-based company said that total revenue for the quarter ending 31 December 2022 had declined by 22% on the prior year. Direct-to-consumer revenue declined by 13% and gross margin for the quarter was lower than its expectations – a performance, it argued was "broadly in line with several of the group's peers".

In The Style said its performance had been impacted due a tough December, during which postal strikes led to disrupted deliveries, and the intensifying cost of living squeeze led to customers tightening their purse strings. As a result the company now expects full year sales to be in the region of £46 million with an adjusted EBITDA loss of between £4.25 million and £4.75 million.

Online fashion giants Boohoo Group and ASOS have both cited delivery disruption as a cause for falling sales during the festive period as shoppers pulled back from e-commerce, preferring to shop in-store to ensure their Christmas purchases arrived on time. On 19 January, Boohoo said its most recent quarterly sales were down 11% while ASOS reported sales down 3% in the four months to 31 December. 

Unlike those two businesses, In The Style operates a unique influencer-led model via which it creates capsule collections in partnership with high profile influencers and celebrities and offers them a financial share in the success of the collection.

In The Style floated on AIM in 2021 when its shares were valued at 105p. With shares now languishing at around 6.3p, the business is considering a delist. It previously announced that it was to conduct a strategic review of the group's business as a whole and that it had appointed Lincoln International to assist with the process. The strategic review is still ongoing and may result in a sale of the company or some or all of the group's business or assets.

Adam Frisby, founder of the business who is acting as interim CEO, commented: "Following an encouraging performance in November and throughout the important Black Friday trading Period, the trading environment in December was more difficult. This reflected high levels of markdown activity across the market, disruption to delivery services, and the impact of cost-of-living pressures on our customers.

"Despite these challenges, we are encouraged by the positive customer reaction to FITS, our own brand range, which provides an exciting opportunity for us to further leverage the strengths of our influencer collaboration model.

"We are firmly focused on launching exciting, unique and inclusive new collections for our customers in collaboration with our influencer partners as well as tightly managing stock, costs, and cash. I remain absolutely confident in the fundamental strengths of the In The Style brand as well as our differentiated model."

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