Increased competition dents profits at Leeds Group

Leeds Group, the wholesaler of fabrics and haberdashery, has reported a rise in full year sales but saw profits drop due to difficult trading conditions and increased competition putting pressure on margins.

The Drighlington-based firm is conducted by its German trading subsidiary Hemmers and Chinoh-Tex, a subsidiary of Hemmers based in Shanghai. These trading companies sell both basic commodity fabrics and also fabrics from their own fashion collections.

For the year to the end of May, Leeds Group reported a 1% rise in sales revenue to £41.5m from £41m the year before, while profit before tax came in at £885,000, down from £1.4m, with Leeds Group saying a Euro denominated parent company loan to its German subsidiary resulted in a small currency loss.

The company said: “The board considers there are still potential growth opportunities for Hemmers, Chinoh-Tex and KMR despite a competitive environment and given the steps taken to improve efficiencies, the directors believe that we are well placed to return to previous profit levels for the group.

“At this early point in the current financial year, sales and profit are in line with the expectations of the board.”