Paul Smith’s fashion company has warned about the impact of inflation after recording a fourth consecutive loss.
The 77-year-old designer’s firm said that sales in its global business increased by 7.7pc, to £212.5m, compared to a year ago. It has recovered to pre-pandemic level.
It posted a loss before tax of £2.3m, but warned that costs could continue to fluctuate, even though prices stabilized in the second half of the year. Since 2020, the company has been losing money.
In company filings, it stated that “the business has recovered strongly but continues to face challenges, including the impact on rising inflation and low customer confidence.”
The ongoing conflict in Ukraine is having a negative impact on the business, and increasing its costs.
Paul Smith ran a few stores in Russia under a franchise agreement, and they remained open until the end of 2022 when Russia invaded Ukraine.
Sir Paul, however, ordered the shops to be closed in February 2023. He admitted that the company had made a mistake in allowing the stores to continue to trade. The decision was made after criticism by MPs and activists, some of whom called for Sir Paul’s knighthood to be revoked.
The company stated that it would continue to monitor the situation and impact of the Israel-Hamas conflict in Russia, Ukraine, and the Middle East.
Paul Smith was founded in 1970 and is now one of Britain’s leading men’s fashion labels. Celebrities such as Lewis Hamilton, Justin Bieber, and John Legend have worn its designs. Paul Smith is famous for its distinctive stripes and patterns, which are used as linings in suits.
Paul Smith’s latest reports show that the demand for tailoring has grown. It also noted an increase of footfall at airports and larger shops as people return to the city centers and the travel industry recovers after the pandemic.
The company started with a small shop in Nottingham and now trades in over 70 countries. According to the Sunday Times Rich List for 2020, Sir Paul’s net worth is £242m. He received a CBE in 1994 for his services to fashion and was knighted ten years later.
He has also designed clothes for Land Rover and a Defender bespoke.
In 2020, the company suffered a major blow when it was ordered to close the majority of its stores around the world.
The Telegraph reported at the time that Sir Paul said: “During my 50 years, I’ve faced many challenges but none have been as devastating as this.”