British icon in the red after Rachel Reeves’ tax hikes costs jobs
John Smedley, the historic family-owned luxury knitwear brand, has been forced to raise prices and make redundancies as it battles Chancellor Rachel Reeves’ tax hikes as it fell into the red.
The Derbyshire-headquartered business can trace its roots back to 1784 and is currently run by the eighth generation of the Smedley family.
Executive chairman Ian Maclean, in new accounts filed with Companies House, cited 2024’s Budget as a key factor in it making a pre-tax loss for the year to 31 March, 2025, alongside high inflation and a weaker Japanese Yen.
The latest results for John Smedley, which has just signed up actor Bill Nighy as a brand ambassador, show it made a pre-tax loss of £720,000 for its latest financial year.
The loss comes after it posted a pre-tax profit of £270,000 in the prior 12 months.
The new accounts also show John Smedley’s turnover declined over the same period from £17.7m to £16.8m.
John Smedley’s Maclean said the company has responded by increasing prices, making redundancies, reducing the size of its range and pausing investments.
Rachel Reeves’ Budget a key factor in loss
A statement signed off by Maclean said: “This was a particularly difficult year for the company with three factors combining negatively to impact our sales and costs.”
The first of the three factors cited by Maclean was the “long tail effect” of a period of high inflation and peaking interest rates in several of John Smedley’s most valuable markets.
The executive chairman said this caused “consumers to prioritise necessary spend over discretionary spend, with a knock on effect into our wholesale business”.
The second factor was a much weaker Japanese Yen which “forced additional price increases in that important export market, weakening our distributor’s buying power and led to a decline in the forward order book across both seasons”.
The final factor highlighted by Maclean was Chancellor Rachel Reeves’ first Budget in October 2024.
He said the Budget “hit sentiment in our manufacturing and retail sectors very hard with the very significant increases in employers’ National Insurance contributions, the National Living Wage and business rates”.
John Smedley was awarded a Royal Warrant by King Charles III in May 2024.
The brand had previously held Royal Warrants from Queen Elizabeth II and the then Prince of Wales for the manufacturing of fine knitwear.