Smythson Narrows Losses After Store Closures and Restructuring Programme

The luxury leather goods manufacturer Smythson, which holds a royal warrant, has significantly reduced its financial losses following a comprehensive restructuring that included the closure of its flagship New Bond Street store in London. The company reported losses before tax of £1.47 million for the year to March 30, 2025, a marked improvement from the £6.69 million loss recorded in the previous financial year.

Turnover declined by 15 per cent to £24.2 million, down from £28.5 million in the preceding year, according to accounts filed by Holdsmyth Limited, the parent company. The decline reflects challenging market conditions characterised by tightening corporate gifting budgets, broader weakness in the luxury goods sector, and uncertainty surrounding potential United States tariffs. The company noted that volatility in international markets continued to constrain growth opportunities across operations in America and France.

The restructuring programme proved effective in offsetting revenue pressures. Smythson reduced operating costs and closed multiple underperforming locations, with employee numbers falling by 14 per cent from 214 to 184. The closure of the Bond Street flagship store, which the company described as materially improving profitability, allowed management to concentrate resources on fewer, more profitable retail outlets.

Physical retail locations demonstrated resilience, delivering like-for-like sales growth of 31 per cent year on year; however, digital performance lagged significantly. Online sales declined by 4 per cent on a like-for-like basis, contrasting sharply with broader United Kingdom market growth of 3.6 per cent. The company attributed the underperformance to shifting consumer behaviour, with customers increasingly favouring social media and mobile commerce channels.

Business-to-business sales also weakened considerably. Corporate gifting revenue declined by 8 per cent whilst wholesale sales fell by 4 per cent, reflecting cautious inventory management among retail partners and reduced spending commitments from corporate clients. The company acknowledged that higher-income consumers continued to purchase premium products, yet more price-sensitive buyers demonstrated increased caution at the luxury end of the market.

Smythson was acquired by Oakley Capital in July for an undisclosed sum, marking a significant ownership change following 16 years under Italian ownership by the Tivoli Group. The brand, founded in 1887 by Frank Smythson, operates a portfolio including weekly diaries retailing at £185 and greeting cards priced at £13. Management indicated that growth remains below historical norms and cautioned that geo-economic fragmentation will continue to pose headwinds to international expansion.