Lounge hikes dividend as international expansion drives sales at underwear brand
Underwear brand Lounge hiked its dividend to more than £10m as its focus on international expansion helped drive up sales.
The Solihull-headquartered company paid a dividend of £10.65m in the year to June 30, 2023, up from £1.7m in the prior period.
The pay out comes after Lounge’s turnover increased from £64.1m to £67.9m while its pre-tax profits fell from £8.1m to £5.5m, according to a recently-filed document with Companies House.
The company, which was launched in 2015, said the decline in its pre-tax profits was due to the “significant investments” it made during the year.
During the year, Lounge opened its fifth store in the UK and opened its first in Germany. It also has UK stores in London, Manchester, Leeds and Bristol.
Lounge was founded by couple Dan and Melanie Marsden and backed by Blackbird Capital Investments.
A statement signed off by the board said: “A continued focus on international expansion is at the forefront of the company’s growth and vision with the company experiencing 13 per cent growth in international sales in the year.
“Continued growth in mainland Europe has been a huge success for the company and will continue to be a target moving forward as well as the further growth in the Americas and Australia.”
Lounge hoping to retain Covid-era customers
On its outlook, Lounge said: “The directors expect the performance of the group to continue to grow and increase over the coming year as e-commerce sales continue to expand worldwide alongside the introduction of new revenue streams as the group moves into the bricks and mortar retail space.
“The group’s D2C model is still proving to be the future of retail however headwinds are expected as the world recovers from Covid-19.
“In 2020/21 the world was pushed into an increased level of online purchasing as a result of global lockdown restrictions.
“However, as customers have returned to the high street this is expected to fall.
“It is however the group’s aim to retain the new customers it has gained over recent years and build on this, resulting in overall growth.”