International sales growth boost profits at online retailer

The latest financial figures from music equipment retailer Gear 4 Music are more in tune with its strategy after it delivered an improvement in its margins.

The York-based business achieved its “primary objective for the period of materially improving gross margins” which increased by 2.5 percentage points to 25.2%.

It was able to do this by “cutting out less profitable sales and focusing on higher margin products”.

It also added nearly £7m in revenues in the six months to September. The retailer saw a particularly big jump in its overseas sales, and its £49.4m sales were split almost evenly between UK and international sales.

Gear4music’s chief executive Andrew Wass said: “We have restored our gross margins to FY18 levels whilst at the same time continuing to grow our revenues and taking market share.

“International sales growth continues to be strong, and whilst the UK market remains highly competitive, we have returned to a more profitable margin structure and believe that this is the right strategy from which to grow our revenues going forward.”

Gear4Music believes it now has “a robust logistics operation in place” ahead of the busier second half of the year. Last year it suffered operational problems, which affected its profit margins and saw it miss out on sales, and was responsible for its share price dropping by more than half.

Wass added: “We are confident that we now have the capacity and efficiency required to make the most of the opportunities available to us.”