Lingerie company Ann Summers has slipped into a red number amid problems at its party-plan business, which sells vibrators and other sex toys in the same way middle class housewives once bought Tupperware.
The privately owned company reported a £3.9m loss for the year to 28 June 2014, down from a profit of £2.4m a year before as sales slid by nearly 12% to £101.2m.
Jacqueline Gold, chief executive of the company controlled by her father, said the year was “challenging” as the company faced difficult economic environment and the need to invest £1.5m in new systems and processes to support its party plan agents. The retailer also didn’t open any new stores over the period, put its Knickerbox chain up for sale and improved its website as it faced increasing competition from rivals such as Lovehoney, the online-only business.
But Gold was upbeat about the current year after a good Christmas when sales at established stores and via its website rose 10%. She said the party plan business was showing “green shoots” and she hoped it would improve while new a premium collection created by fashion designer Giles Deacon had helped lift sales. “The forecast for next year is for healthy profit, currently predicted to be £1.5m and we are confident that significant growth will occur throughout the year to enable us to achieve, if not exceed this figure.”
The company plans to open up its website to international trade this autumn and exploit partnerships with other sites including Asos, Amazon and eBay, and will also invest £1m in refurbishing several of its stores. Gold said some loss-making stores might close but it would also invest in new outlets if the right opportunities arose.
