EDINBURGH Woollen Mill directors have underlined their confidence in the retail giant’s strategy as they unveiled plans to open 100 stores against a tough backdrop after it achieved strong growth in profits.
The EWM group, which owns Peacocks as well as the eponymous chain, highlighted the challenges facing retailers at a time when budget operations such as Primark and established names including Marks & Spencer are fighting for market share.
Owned by retail tycoon Philip Day, the Langholm-based group also flagged a growing squeeze on consumers' disposable income.
However, directors said the group is well placed to continue a rapid expansion programme which they expect to result in the group opening 53 stores during the current year, and creating 800 jobs in the process.
They plan to open a further 100 stores in the two year period leading up to February 2018.
The group delivered fresh record profits with its no frills approach to retailing in the year to 28 February 2015. It made £91.2 million pre-tax profit, up 28 per cent on the £71.3m achieved in the preceding year.
Total group sales increased to £562.6m, from £551.9m.
In a statement, the group said the fact it is debt free and has a strong balance sheet puts it in a good position to continue its strong performance to date.
Directors are confident the flagship Edinburgh Woollen Mill business has built a successful formula, based on targeting the expanding over 40s age group. The company has noted the potential to broaden its customer base, helped by widening the product range.
Total sales fell at the EWM chain in the latest financial year, to £166.2m, from £168.5m in the preceding period, after the company closed a small number of underperforming stores. But sales increased on a like-for-like basis, which strips out the effect of changes in the number of stores.
Edinburgh Woollen Mill noted it had achieved further growth in sales in destination towns such as Oban, Fort William and Oxford, due to strong numbers of overseas visitors keen on buying British.
Online sales of Edinburgh Woollen Mill products grew by 15 per cent annually, partly thanks to an enhanced e-commerce platform that offers a click and collect service.
The Peacocks business, which the group said focuses on value fashion for the entire family, grew sales by eight per cent annually to £351.7m, from £324.9m.
The group has invested £150m in Peacocks’ store estate and online presence since buying the business out of administration in 2012.
Purchases made on mobile devices rose by 154 per cent in the latest year during which the firm introduced a new mobile optimised online sales platform.
Steve Simpson, group commercial director, said Peacocks is benefiting from a truly omni-channel approach comprising online, mobile and high street, as well as out of town stores and concessions.
He added: "While this has helped boost sales across both brands, control of sourcing and input prices has helped deliver strong margin growth.”
Online sales also rose by 23 per cent in the latest year at the Jane Norman womenswear business, which the group bought out of administration in 2011. It put Jane Norman’s 24 stores into administration in June last year, leaving online operations and concessions trading.
The group also owns homewares retailer Ponden Mill, and golfing brand Pro-Quip.
The group operates more than 1,000 stores across the UK and Ireland, including 477 Peacocks shops. It employs more than 10,000 staff.
In December last year the group announced plans to open 76 stores in the following 12 months.
Mr Day led a £67.5m management buyout of Edinburgh Woollen Mill from Rutland Fund Management in 2002.
The Edinburgh Woollen Mill was founded in 1946 by the Stevenson family as the Langholm Dyeing and Finishing Company.
In 1996, the Stevensons netted around £33m when Grampian Holdings bought the firm for £69m.
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