The trio of key brands owned by TFG — Whistles, Hobbs and Phase Eight — have reported their results for the year to the end of March and it’s clear that like many others in the UK fashion sector, they faced a very tough market.

First Whistles. While the latest period for the company was a 53-week one compared to 52 weeks a year earlier, its turnover fell to £65.7 million from £73.7 million. And adjusted EBITDA was down to £4.9 million from £8 million, while operating profit dropped to £2.5 million from £6.4 million and profit after tax was just £0.9 million after £5.6 million a year earlier.

The company said that the premium womenswear brand had enjoyed a strong previous year making comparisons particularly difficult, and despite the challenging economic backdrop in the UK where the market fell into recession in the final quarter of 2023, whistles achieved “a solid set of financial results” for its latest period.

In line with its strategic objectives, its direct channel mix grew to 50% from 48.9% and the online sales mix increased to 49% from 46%.

So what caused the sales and profits fall? We’re told that while there was growth in own channels, the sales story was impacted by underperformance in concessions, where sales fell 14%. This reflected wider macroeconomic challenges as well as those difficult comparisons due to the demand post-Covid that benefited the sales figures in the previous year.

But the company is continuing to invest in its store estate and to build its digital capability and during the year it opened four new stores under its Bigger Better strategy, also closing some that weren’t strong enough contributors to the strategy. That meant its total store numbers including concessions at the end of the year added up to 111, down from 123 a year earlier but presumably in a better position to maximise sales opportunities.

The wisdom of the strategy is suggested by the fact that the gross margin for the year improved to 67% from 65.5% despite the promotional environment and supply chain disruptions.

The same issues seemed to affect the Hobbs chain as turnover there fell from £129.3 million to £123.9 million in the latest year, although adjusted EBITDA was actually up very slightly at £18.7 million and operating profit rose to £13.9 million from £11.9 million. Profit after tax edged down to £9.8 million from £10 million.

Again, it was a 53-week year during which the company also had to cope with a challenging backdrop and the fact that the previous year had been a particularly strong one. 

Hobbs said the direct channel mix grew to 62.4% from 61.3% and the international mix increased to 13% from 11%. The acquisition of the remaining 50% of the shareholding in Hobbs Hong Kong, a joint venture, was part of the international growth. 

As with Whistles, the company said Hobbs suffered from lower sales via concessions with a drop of 14%, as with Whistles. 

The Bigger Better strategy saw the company opening five stores during the year and closing others to end the period with 135 locations, down from 141.

Again, its strategy boosted the gross margin, which rose to 67.4% from 64.7%.

Finally, Phase Eight saw its turnover falling to £91.7 million from £96.3 million in the 53 weeks. Adjusted EBITDA fell to £2.2 million from £3.4 million and it made an operating loss, although at £1.3 million it was smaller than the £2.1 million loss of the previous year. Its profit after tax dropped to £0.4 million from £3.7 million.

Those same issues of tough comparisons and challenging conditions affected the business, although it managed to grow its direct channel mix to 52.5% from 45.3% while the international mix increased to 5% from 3%. As with Hobbs, the acquisition of its Hong Kong joint venture was important here.

Once again, it was the concessions channel that underperformed and its sales dropped 12%, less than the 14% seen as Whistles and Hobbs. But the company’s own channels, particularly online, saw improvements.

The company opened 14 new stores under the Bigger Better strategy during the year and, like its portfolio-mates, closed a number of others resulting in 137 locations at year-end compared to 164.

As with Whistles and Hobbs, the gross margin improved, rising to 63.5% from 58.8%.