Seraphine reveals challenges in H1 results
Maternity clothing brand Seraphine expects a decrease in product revenue for the first-half ending 2 October 2022.
The company anticipates product revenue to be £19 million, compared to £20.8 million in H1 2021. It also expects an adjusted EBITDA loss of £1.5 million.
Seraphine's performance was impacted by the "continuing challenging retail trading environment and softer trading during the summer months, consistent with the broader retail sector".
Own digital platform sales declined 9%, due to inflation in marketing costs and lower than planned spend.
Digital partner revenue was lower, as expected, as the business managed this channel with a focus on improved profitability.
However, trading in its retail stores increased 20% year-on-year but remains behind pre-pandemic levels.
Gross sales and basket sizes increased but as returns rates reverted to pre-pandemic levels, net sales were impacted. Despite this increase, the company said it was not seeing returns rates across its markets exceed pre-pandemic levels. Seraphine believes this is due to its "niche customer demographic, the needs-based nature of product and carefully balanced promotion and pricing".
Looking ahead, Seraphine expects volatility in trading to continue throughout FY23. It believes H2 will be an improvement on H1 as it starts to annualise against normalised returns rates and higher marketing costs, and take benefit from seasonally higher basket sizes and lower return rates.
David Williams, CEO of Seraphine, said: "Along with many retailers, the summer months were challenging for Seraphine. The continued pressure on marketing costs and weak consumer sentiment, coupled with our own strategic focus on improving margins to drive future profitability, have resulted in a decline in sales over the period.
"An encouraging start to our AW season has been followed by more recent weaker trading. Our outlook is for the second half to be better than the first given the extremely weak summer period and softer forward comparatives, although we expect performance trends to remain highly volatile throughout."