WG expects to meet expectations after recent modest improvement
If the improved UK performance and maintenance of export sales seen in recent weeks continues, fabric group Walker Greenbank expects its full year to be in line with expectations after its brands suffered in the first half of the year.
‘The sales performance in the first nine weeks of the second half has seen some modest improvement. In the UK the trend has been less negative and, in total, sales to overseas markets have been broadly similar to the same period last year. Subject to this trend being sustained over the key Autumn selling period, the board expects the outturn for the year ending 31 January 2019 to be in line with its expectations,’ said Terry Stannard, Walker Greenbank non-executive director.
‘The first half of the year was characterised by a difficult trading environment in the UK for the group's Style Library portfolio of brands (Sanderson, Morris & Co., Harlequin, Zoffany, Scion, and Anthology) and mixed trading conditions in export markets. To mitigate the difficult environment the board has increased its focus on growth-based strategic initiatives including international expansion, licensing and product category extension and has identified a number of cost-saving opportunities,’ he said.
In the six months to 31 July Harlequin incorporating Scion and Anthology saw a reduction in worldwide sales of 9.5% in reportable currency, compared with the same period last year, to £14.4m. Whilst Harlequin remains one of the UK's leading mid-market contemporary brands, UK sales reduced by 10.2%. Total export sales fell 8.5% in reportable currency, down 7.6% in constant currency in the first half. In the US, Harlequin was down 0.2% in reportable currency, up 5.6% in constant currency. Sales in Western Europe fell 14.0% in reportable currency and fell 15.7% in constant currency when compared with the same period last year.
The Scion brand continues to be a valuable brand for licensing where the contemporary and graphic nature of the designs work well with licensed products. The brand's designs have translated very successfully to a wide range of licensed product ranging from bedding and bathroom products to window furnishings, apparel, gifting, stationery and tableware. This fresh, accessibly priced brand continues to be a success with younger, aspirational customers.
The Anthology brand continues to grow and its range of wallcoverings and complementary fabrics remains inherently suitable for contract applications.
Worldwide sales at Sanderson, one of the oldest surviving English soft furnishing brands, incorporating the Morris & Co brand were down 7.6% at £11.2m in reportable currency, compared with the same period last year. Sales in the UK decreased by 13.2%. Sales in the US were up 7.2% in reportable currency, 13.7% in constant currency. Sales in Western Europe were down 8.5% in reportable currency, 10.7% in constant currency.
The Morris & Co. brand has continued to see positive sales performance helped by the Pure Morris collection that interprets William Morris' iconic designs in a neutral colour palette opening the potential of the brand to a wider audience.
Zoffany, positioned at the upper end of the premium market, saw worldwide sales reduce 9.6% in reportable currency compared with the same period last year to £5.7m. UK sales were down 11.6%. Sales in the US were up 4.3% in constant currency and sales in Western Europe were down 5.5% in constant currency.
Worldwide sales at Clarke & Clarke were up 7.8% at £11.1m in reportable currency compared with the same period last year. UK sales were up 11.9% at £6.5m compared with the same period last year, boosted by the launch of a number of homewares ranges including ready-made and made to measure curtains, bedding, cushions and furniture. These launches form part of the product category extension growth strategy.
Licensing income grew by 35% to £2m, while manufacturing sales rose by 1.4% to £16.3m.