Fat Face, the fashion chain chaired by former Marks & Spencer boss Lord Rose, has warned of “challenging” trading conditions despite racking up record annual sales.
The surf-inspired retailer, which earlier this year shelved plans for a stock market flotation, said revenues rose by 12 per cent to £200 million in the year to the end of May, helped by store openings and a 7.6 per cent increase in like-for-like sales, which strip out the effect of new selling space.
Underlying operating profits jumped 26 per cent to £39.3m, and although the firm said consumer confidence was improving, “the outlook for the year ahead remains challenging”.
However, it added: “The board remains confident in the group’s prospects for the current financial year.”
Fat Face, backed by private equity firm Bridgepoint, had been planning to raise £110m through an initial public offering (IPO), but said in May that it had cancelled the move due to “current equity market conditions”.
Writing in the company’s annual report, Rose said: “The group withstood the extra scrutiny that an IPO process requires and I believe has come out stronger as a result. The group is now fully focused on continuing the momentum of the past few years and pursuing a range of opportunities for further growth, both in the UK and internationally.”
Fat Face started life in 1988 when founders Jules Leaver and Tim Slade began selling T-shirts and sweatshirts from a campervan in the French Alps, and now has more than 200 stores across the UK and Ireland.
Rose added: “The group has a good pipeline of new space in the UK and identified opportunities to relocate and expand existing stores during the coming year. The first steps into the US will also start in 2015.”