Stella McCartney sales, profits rise in UK but growth slows

By

Sandra Halliday

Published
Nov 22, 2018

Stella McCartney is continuing to expand with the UK-based designer’s accounts for the fiscal and calendar 2017 year showing rising sales and profits in its domestic market.

However, its UK figures didn’t exactly show it progressing in leaps and bounds with revenues there up only 2.1% to £42.5 million and net profits rising a smaller 1.5% to £7.1 million. Pre-tax profit was £9.08 million, down from £9.51 million in the previous year. And operating profit fell 4% to £9.1 million after rising as much as 43% in the previous year. 

So why was 2017 so different to 2016? Well, sales had risen as much as 31% a year earlier but had been artificially boosted in Britain by the Brexit effect. Back then, luxury tourists flooded into London following the post-EU-vote plunge in the value of the pound. A number of UK-based luxury brands have already said that the tourist flow slowed after that initial impact, skewing their results to paint a more negative picture than they perhaps deserved.

Bak with McCartney, the figures, as mentioned, cover the label’s UK-only business and its licensing operation, but it’s the closest we can get to seeing how the label as a whole is performing as the overall business’s account are rolled into those of parent firm Kering. They aren’t broken out separately by the French group but with McCartney due to take back control of the business from Kering next spring, it’s to be hoped that the company shares more information.

For now, in the accounts, the firm said its strategy is to consolidate its range of high-end, exclusive products, support its luxury positioning and enhance the image of its stores and concessions portfolio.

It’s still focused on expanding its physical footprint with new owned stores and concessions and is targeting Asia in particular.

In a press interview linked to the results, the company’s CEO Frederick Lukoff, highlighted the importance of Asia saying that the company’s menswear collection, which was still new in 2017, had been well received, especially in Japan.

And the brand’s kidswear business also appears to have gone down well there. The label operates kidswear standalones in Asia and the response to this has been so good that plans are being made to open them in western markets as well. But first, it will open more kids’ stores in China.