Gear4Music sets stage for growth as sales hit £42m
Gear4music plc, the largest UK-based online retailer of musical instruments and music equipment, has reported growth in sales of 36% for the half year mark of 2018.
During the six months ending 31 August, the York-based group saw overall sales increase from £31.2m to £42.5m.
This figure was boosted by the 40% increase in active customers which now stands at around 547,000.
As for Gear4Music’s international operations, its German distribution centre saw a 230% increase in orders fulfilled; and a new Swedish distribution centre is on track to be operational by the end of October 2018.
Andrew Wass, Gear4music’s CEO, said: “We have continued to make good progress over the last six months, with sales growth during the period of 36% being ahead of our expectations. Our core UK market continues to perform well and with the UK distribution centre upgrades we announced in May progressing to plan, we are well positioned to deliver further strong sales growth during the busier second half of the year.
“Whilst still strong, European sales growth reflects a slower than anticipated build-up of inventory at our European distribution hubs, particularly in Sweden. Completion of the move into our new higher capacity Swedish distribution centre by the end of October, combined with the recent expansion of our European purchasing team will mean that the range and depth of inventory at both of our European locations will be increased ahead of peak season.
Wass added: “As noted in our AGM statement, we have seen an increase in competitive pressures across our industry which is having an impact on short term gross margins. At this stage in our growth cycle we remain focused on best serving our customers, and see opportunities to rapidly increase our market share as the industry continues to consolidate and shift from traditional retail to agile e-commerce.
“We are confident that strong sales growth alongside a controlled overhead cost base will compensate for short term gross margin compromise. The Board expects EBITDA for the full financial year to be in line with our expectation.”
The group will report its interim results for the six months ending 31 August 2018 on 16 October 2018.
