Andy Murray-backed Castore slumps to loss despite sales surge
Castore, the British sportswear brand backed by the likes of Sir Andy Murray and the billionaire Issa brothers, has slumped to a loss despite its sales jumping by £75m.
The Manchester-headquartered business has reported a pre-tax loss of £28.8m for the year to 4 February, 2024, according to newly-filed accounts with Companies House.
The loss comes after the brand posted a pre-tax profit of £14.6m for its prior 12 months.
However, the new results also show its turnover surged from £115m to £190.3m over the same period.
Castore’s accounts show that it incurred exceptional costs of more than £24.4m in the year which pushed it into the red.
However, even before taking into account those extra costs, the firm’s operating profit was slashed in the year from £16.5m to £399,148.
The exceptional costs included £2.1m for ‘Warehouse consolidation’, £9m for stock provision, £6.3m in fundraising costs and £3.8m for ‘onerous contracts’.
Supply chain issues hit Castore
A statement signed off by the board said: “The company implemented a strategy to improve the efficiency of its supply chain during the period, which included the consolidation of some of its UK warehouses.
“This presented challenges to the business, which adverse effects on both our operations and our customers’ ordering experience.
“Management mitigated these impacts by increasing staffing levels temporarily and reducing promotional activities during the period, however, trading was adversely affected over the second half of the period.
“The company also incurred additional costs to ensure customers’ orders were fulfilled and the company took a significant write off of stock as a result of stock missing the optimum clearance window.”
Castore added: “Management are confident that the transition will facilitate future efficiency improvements and that all short term issues are now resolved.”
During the year, the average number of people employed by the company rose from 399 to 517.
In the UK, Castore’s turnover increased from £79.8m to £106.1m and surged from £25.3m to £59.6m in Europe.
In North America, its sales increased from £3.1m to £4.4m and they rose from £6.6m to £20.1m in the rest of the world.