Pre-tax profit loss of more than £1.2m for listed textiles firm

Drighlington-based Leeds Group is to close the Chinese arm of its main trading subsidiary after a difficult year of trading.

The firm, which is focused on the import and sale of fabric imported mainly from the Far East, has today posed its final results for the year ended 31 May 2019.

The business made a pre-tax profit loss of £1,250,000, compared to profits of £885,000 last year. Its latest revenue was £41.3m compared to £41.5m in 2018.

Leeds Group said market conditions for all its trading subsidiaries have been challenging with all companies facing “intense” competition both domestically and internationally.

Company chairman Jan Holmstrom said: “It has been an extremely difficult and disappointing year for the Group.

“Trading conditions have continued to be challenging with increased competition creating pressure on gross margins within both the wholesale and retail textile markets.

“Hemmers-Itex Textile Import Export GmbH, the main trading subsidiary, has been affected by the deterioration in both its German and external markets.

“The directors see the need to further concentrate on the Group’s core business, Hemmers, and have implemented plans and cost cutting measures to ensure the company is in a good position both to face the current challenging market conditions and to respond to any improvement.

“A decision has been made to close Chinoh-Tex, the Chinese subsidiary of Hemmers, as it is not generating adequate profits despite recent actions taken to reduce costs.

“A number of measures have been implemented in [our subsidiary] KMR to further improve efficiencies and reduce the cost base, such as implementation of new IT systems and changes to how shops are staffed and managed.

“Management will closely monitor the performance of the KMR retail outlets and take the necessary actions to ensure satisfactory levels of profit are achieved in each.

“Trading conditions remain challenging and it will be a difficult year again in 2020, as it will take time for the decisions taken this year to fully translate into improved results.”

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