Supply issues subdue profits at In The Style

The Aim-listed womenswear brand reported a 38.8% improvement in revenues in the six months to 30 September, to £29.8m. But earnings before interest, tax, depreciation and amortisation fell 51.7% to £1.2m, while pre-tax profits were off 51.3% at £890,000.

The e-commerce specialist said profitability had been impacted by industry-wide supply chain disruption, which was expected to continue throughout the second half, as well as higher return rates year-on-year. It said that the latter was being addressed through increased investment in product, garment technology and fitting.

Adam Frisby, founder and outgoing chief executive, said In The Style had delivered "very strong sales growth and strategic progress" in the first half.

He said: "The business has continued to build on its exceptional growth in the prior year, despite the reopening of physical retail and lifting of social restrictions during the period.

"While the global supply chain and freight disruption that has impacted across the industry is expected to persist for at least the remainder of the year, we are pleased to report that the strong sales performance achieved during the first half has continued through Black Friday and into the festive trading period so far."

Since the September end, In The Style said direct-to-consumer sales had continued their "strong growth trajectory" but sales to wholesale partners were lower year-on-year.

Frisby is stepping down in January to become chief brand officer, a newly created board-level executive directorship. He will be replaced by Sam Perkins, former managing director of the retail division at The Very Group.

As at 0930 GMT, shares in In The Style were off 6% at 95.0p.

Wayne Brown, analyst at Liberum, said: "In The Style continued to deliver very strong growth in the first half.

"Brand awareness continues to expand, helped by the launch of ten new influencer partnerships in the first half and two more since, as well as entry into 100 Asda stores. The momentum has continued into the third quarter…leaving the group well placed to achieve full-year expectations."

Liberum, which has a ‘buy’ rating on the stock, acts as nomad and broker to In The Style.