Hackett, the luxury menswear brand, had a tough year as the COVID-19 pandemic impacted its sales. In the year ending in March, the company reported a 39.2% decrease in turnover, amounting to £59.5 million. The decline can be attributed to reduced interest from consumers in bespoke tailoring and ready-to-wear formalwear. This led to a significant increase in EBITDA loss for Hackett, rising by 119% to £8.5 million compared to the previous year’s loss of £3.9 million. Although the net loss also increased slightly from £22.23 million to £20.58 million, the company managed to maintain its retail estate.
The retail business of Hackett was severely affected by the pandemic, with various lockdowns causing a drastic reduction in sales. Full-price stores saw sales drop by a staggering 82.3%, while outlets experienced a decline of 73.7%. To put this into perspective, the previous year witnessed a 9% decrease in full-price store sales and a 2% increase in outlet sales. It is important to note that the full impact of the pandemic was only felt during the final month of that year.
Despite the challenging circumstances, Hackett showed resilience by maintaining its retail presence. By the end of the year, the company had 13 own stores and 6 outlets in the UK, with a slight reduction from the previous year when they also had one concession. However, the most encouraging aspect was the significant growth of e-commerce sales, which rose by 85.2% after returns. This follows a 6% increase in the previous year. Hackett attributed this success to improvements in its website, leading to a 30% increase in sessions and a 56% improvement in conversion rates.
To address the challenges posed by the pandemic, Hackett implemented a transformation plan that resulted in a 37% reduction in outgoings during the period. Launched in the 2019/20 financial year and accelerated in the latest year, this plan aims to enhance the company’s efficiency and profitability. It focuses on optimizing traditional channels like wholesale, franchise, and physical retail, as well as improving digital processes and sales. Despite the ongoing risks from the pandemic, Hackett’s parent company, Pepe Jeans SL, remains committed to supporting its operations.
Despite facing significant challenges, Hackett’s ability to adapt and maintain its retail presence, along with the growth of its e-commerce sales, provides hope for the future. With the implementation of a transformation plan and ongoing support from its parent company, Hackett aims to overcome the obstacles presented by the pandemic and emerge as a stronger and more profitable brand in the luxury menswear market.
Useful links:
1. Hackett official website
2. Pepe Jeans SL official website
