Woollen Mill hit by rising prices and falling pound

RISING raw material prices, higher energy costs and the weakness of the pound conspired to eat into profits at Edinburgh Woollen Mill (EWM) Group, wiping out the benefits from opening more shops.

The Langholm-based business – which also owns the Ponden Home textiles chain, created through the merger Ponden Mill and Rosebys – dropped by 25 per cent in the year to 26 February to £12.5 million.

Turnover edged up by 1.4 per cent to £195.8m after the number of EWM branches increased to 354 from 321, out-weighing the closure of six Ponden Home outlets.

As the downturn in consumer confidence continued to bite, the group’s directors warned like-for-like sales at EWM had turned “slightly negative”. The group admitted 2010-11 was “not the best year on record”, but said it had managed to trim its costs by 1 per cent.

Chief executive Philip Day staged a £67.5m management buy-out of EWM in 2002 and the group is now owned by him and his family. The highest-paid director’s package jumped to £4.7m from £2.6m. No dividend was recommended. In June, the group bought part of collapsed fashion chain Jane Norman.

PETER RANSCOMBE