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Tiso Group sees losses widen but expects to be back in the black

OUTDOOR equipment and clothing retailer Tiso Group has seen its losses more than double in its most recent financial year but indicated it is back trading profitably.

According to accounts filed at Companies House four loss making units in the Graham Tiso subsidiary brand racked up operating losses of more than £621,000 in the 12 months to January 26.

There was a further £1.05 million of one-off charges - including lease breakage and advisor fees - for shutting those outlets in Belfast, Newcastle, Blackford near Perth and Inverness.

Shareholders in Tiso Group, which has its registered office in Edinburgh but stores across Scotland and the north of England, introduced £495,000 of new loans in the financial year to partially offset the closure costs.

Tiso Group last month sold a majority stake to stock market listed retailer JD Sports for an undisclosed sum although members of the founding family, including chief executive Chris Tiso, remain shareholders.

Finance director Ben Thomas pointed out the company had opened larger locations in Perth and Inverness which allowed it to transfer staff across and the actions taken meant the business was better placed for growth.

He said: "The key thing for us is what we recognised at the end of 2012 was we needed to do something to get the business into the best shape we could.

"Even though that was quite an expensive exercise in terms of losses and shareholder loans we think it was the right thing to do. It has set the business up on the right scale going forward.

"It is a bit of an investment in the long-term. We had to spend a bit to get rid of those shops but thereafter [we knew] there would be a pretty significant positive impact on the business." While turnover across Tiso Group, which also includes the Alpine Bikes and George Fisher brands, nudged upwards from £25.4m to more than £25.65m overall pre-tax losses widened from £1.13m to more than £2.3m in the 12 months to January 26 this year.

Underlying operating losses from continuing operations halved from £962,742 to £459,677.

The accounts for Graham Tiso show its continuing operations posted a £624,431 operating loss.

In the Tiso Group accounts Alpine Bike and George Fisher were both said to have recorded sales and operating profit increases in the financial year.

Writing in the accounts the directors admitted they expected competition in the outdoor and cycling retail arenas to remain fierce but they believe the restructuring will deliver a "significant turnaround" in profitability.

Operating profits across the group were said to be running around £534,000 ahead by the summer of the current financial year.

Mr Thomas confirmed all subsidiaries are trading profitably and the company is gearing up for the festive trading season.

He said: "Week to week sales are increasing which is what you would expect at this time of year but it really takes to the end of the quarter to see how it has gone.

"Week to week can be quite volatile depending on what the weather is doing this year compared with last year."

At the time of the JD Sports deal Mr Tiso said the business, which was founded by his father and mother, had not been forced into finding a partner to support it financially.

Instead he insisted the agreement with JD, which also owns Blacks and Millets, would allow Tiso Group to accelerate expansion plans and improve its multi-channel offering.

He also moved to reassure staff and customers the group's service levels and product range would not diminish.

The accounts state Mr Tiso did not draw a salary during the year.

Directors' remuneration dropped from £325,876 to £211,024 with the emoluments of the highest paid director flat at £101,542.

In spite of the store closures average staff numbers grew from 370 to 378.

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