In The Style’s Efforts to Overcome Revenue Decline Pre-Acquisition

In The Style, a fast fashion retailer, grappled with declining revenues before being rescued through its acquisition by Baaj Capital last year for a sum of £1.2 million.

Amid reports of financial challenges and a strategic review, the British company, founded by Adam Frisby, faced a tumultuous period, leading to a reduction in profit guidance. The impact of this difficult phase is evident in In The Style’s recent financial report, filed with Companies House, covering the year ending March 2023, the month of its acquisition by Baaj.

During this period, the company reported a revenue of £46 million, a decrease from the previous year’s £57.3 million, marking a 19.8 percent year-on-year decline. The adjusted EBITDA reflected the company’s latest trading statement, indicating a loss of £4.3 million.

The decline in figures was primarily influenced by an 11 percent reduction in direct-to-consumer sales, amounting to £40 million. The second half of the year witnessed a significant 21 percent decline, attributed to the “well-documented industry peer performance” and the impact of the cost-of-living crisis in the UK.

Wholesale revenues also suffered, plummeting 52 percent to £6 million, down from the previous £12.6 million, primarily due to the “prevalent issue of excess inventory.” This division constituted 13 percent of the total revenue.

Despite these challenges, the company achieved a gross margin of 45.2 percent, marking a 131-basis point improvement year-on-year. This improvement was attributed to strategic retail pricing, optimization of promotional spending, and agility in product sourcing.