Gymshark puts 300 jobs at risk despite record sales
Gymshark has put almost 300 jobs at risk despite reporting record sales for its latest financial year this week.
The Solihull-headquartered company, which was co-founded by self-made billionaire Ben Francis, has entered into a consultation with 296 employees, almost a third of the total workforce.
The news, first reported by Drapers, came on the same day Gymshark revealed its revenue had passed the £600m mark for the first time.
The business posted sales of £607.3m for the year to 31 July, 2024, up from the £556.2m it achieved in its prior 12 months.
The rise in revenue means that the business has increased its sales for a 12th consecutive year.
On the proposed job cuts, a Gymshark spokesperson said: “We can confirm we have proposed a business restructure, which will place approximately 296 roles at risk of redundancy.
“However, at the same time, we will be creating 168 new roles to help drive our future growth.
“Therefore, our immediate priority is to help and support those at risk through this process, while seeking to offer as many of them as possible these new roles.
“We find ourselves in a time of intense macro-economic volatility. We, like so many others in the retail sector, need to be set up not only to weather these near-term storms, but also to build and grow in the future.
“We have therefore carefully reviewed our operating model and organisational structure to ensure we have the right teams and roles to support these goals.”
Gymshark profits fall for third year in a row
But despite the rising sales, the company’s pre-tax profit fell for the third year in a row.
Gymshark’s pre-tax profit declined for the first-ever time in the year ending July 2022 and fell from £27.8m to £13m in the 12 months to July 2023.
The company’s latest accounts show that its pre-tax profit has fallen further to £11.8m.
Over the year, the company’s headcount increased from 853 to 881 – a figure which is now set to be significantly reduced.
Gymshark was founded by Ben Francis and Lewis Morgan in 2012. In 2020, it was valued at more than £1bn when US private equity firm General Atlantic acquired a 21 per cent stake.
On its latest results, CEO Ben Francis said: “Despite well-reported economic turbulence, FY24 represented another strong year of growth for Gymshark.
“We broke the £600m barrier for the first time, and adjusted EBITDA rose by double-digit numbers.
“Looking to the future, it’s no secret that the retail sector is feeling the strain from macro-economic pressures.
“As such, we are ensuring we have a heightened focus on controlling our expenditure, so we are best set up to become a fully omnichannel business and realise our dream of becoming a 100-year brand continuing to make the best gym products for our consumers.”