Gymshark was worried that it would stagnate this year, for the first since Ben Francis co-founded the company in 2012.
Solihull’s activewear brand was valued at over £1 billion in 2020 when General Atlantic, an American private equity company, bought a 21% stake. In its accounts, it said that sales in the year up to July “tracked at the same levels” as they were in 2022 when they reached £484.5 millions, up by 21 percent.
Francis said in the accounts that were approved in January that “the directors expect that the previous growth path that the group experienced at different times will no longer continue in the same manner.”
Gymshark is now trading according to its forecasts. Since then “double-digit growth” has resumed as consumer spending has recovered.
More than 900 people are employed by Gymshark in Britain and abroad. The brand is worn worldwide by celebrities such as Rita Ora, Nicole Scherzinger and others. The pre-tax profit for the year ending July 2022 dropped by 39 percent to £27.8 millions. It stated that it intended to remain profitable, and would reduce stock levels and other costs if the sales growth continued to slow.
Francis, 30, has taken back the reins of the company as CEO in 2021. He hired Stacey Cartwright as a non executive director, who was the former chief executive at Harvey Nichols. The company is owned by the entrepreneur to 70 percent and there was no dividend paid for a 2nd year running. As a result of a reduction in bonus, the salary for the highest-paid Director fell from £1.16m to £519,000. A spokesperson declined to confirm that Francis was the winner.
Gymshark grew in 2022 mainly due to its overseas markets. This included the United States. Revenues in Britain increased only by 3 percent, reaching PS89 million. It opened its (first physical store) on Regent Street, central London in October. Its Denver office cut 65 jobs in January of this year, a sign its growth in the US has slowed.
The company faced “challenges”, a spokesman stated, citing increasing input costs and declining consumer spending. However, the spokesman added that it chose to continue investing rather than protecting its profitability. He said that “our decision to invest at the time we did is now paying off globally.”
Francis, who visited Gymshark factories in Turkey yesterday, was valued at £900 million, which placed him third on the list of young rich. He left Aston University, Birmingham in 2012 to start Gymshark. Last year the university gave him an honorary PhD in business administration. Francis’ wife, Robin Gallant a fitness influencer and Canadian, gave birth on Christmas Eve to twins last year. Francis received an MBE as part of the new-year honours.