Monsoon Owner Reports Steep Losses Amid Weak Consumer Demand And Inflation

Monsoon and Accessorize owner Adena Brands has plunged into the red, reporting a pre-tax loss of £7.5 million for the year ending August 31. This is a sharp contrast to the £14.1 million profit recorded in the previous financial year. Turnover fell to £204 million, down from £231 million, reflecting the impact of challenging trading conditions and escalating costs.

The group attributed the losses to weak consumer demand coupled with significant wage and cost inflation. It also admitted to underperformance in key areas including its store portfolio, childrenswear division, and key international markets such as Saudi Arabia, Italy, and Germany. Investments made to address these challenges contributed to the weaker financial performance during the year.

Last year marked another challenging period for the retail sector as Adena Brands sought to revitalise its operations under chief executive Nick Stowe’s leadership. The company has been undergoing a turnaround since its 2020 administration, which led to the closure of many stores. The retailer, which had approximately 230 shops before its collapse, now operates about 150 in the UK.

Despite the disappointing results, Adena Brands has made progress in reversing its fortunes. Investment in underperforming areas has started to yield positive returns, with the company citing improvements in sales, profitability, and key markets since the financial year ended. Stowe remains optimistic about the group’s long-term recovery, describing 2024 as a “tough year” but highlighting the progress achieved in strengthening the business.

However, the ongoing challenges of weak consumer spending and additional wage increases indicate that the retail sector remains under pressure. Adena’s results shed light on the broader environment facing UK retailers as businesses continue to navigate a sluggish post-pandemic recovery and rising inflation.

Looking ahead, Adena Brands will focus on leveraging the improvements made, with an emphasis on driving growth in its core markets and building on the progress achieved over the past year. The signs of recovery offer hope as the organisation seeks to consolidate its turnaround and adapt to an evolving retail landscape.