‘Difficult year’ for textiles wholesaler and retailer

Listed Yorkshire textiles business, Leeds Group, has reported Group revenue for continuing operations of £35m (2019: £39m) in its final results for the year ended 31 May 2020.

The company also made a pre-tax loss of £2m (2019: loss £1.3m).

Market conditions for both the company’s trading subsidiaries – Hemmers and KMR – have been described as challenging, with Hemmers contending with “intense” competition both domestically and internationally.

Leeds Group’s report notes: “The consequences of the Covid-19 pandemic affected both Hemmers and KMR severely in the last three months of the financial year.

“Although the German government provided financial support, the reduced sales figures did not produce enough contribution to cover the fixed overheads and therefore both Hemmers and KMR made losses for the year.

“Thus, the Group’s operating loss from continuing activities was £1,756,000 (2019: loss £1,053,000).”

Commenting on the latest results, company chairman, Jan Holmstron, said: “It has been a difficult year for the Group.

“As previously communicated on 31 March 2020, the directors have implemented a number of cost cutting measures, identified through a strategic review undertaken last year, to refocus on our core business and ensure the Group has the appropriate infrastructure and cost base aligned to its sales levels.

“Both Hemmers-Itex Textil Import Export GmbH and Stoff-Ideen-KMR GmbH businesses were considerably restricted from March 2020 when the German government imposed a country wide lockdown in response to the Covid-19 pandemic.

“Hemmer’s wholesale business was affected by the imposed lockdown and KMR’s retail shops were closed from mid-March to mid-April 2020.

“Both businesses suffered significant sales reductions in the final three months of the year, the effect of which could only be partly offset by the mitigating actions taken by management and by government financial aid.

“Thus, both companies have experienced significant losses in the financial year to 31 May 2020.

“Even though the Covid-19 situation is still impacting the marketplace, sales levels for Hemmers and KMR in the first few months of the new financial year have been better than expected.

“However, there is a risk that there may be further local or country wide restrictions which would again affect trading.”

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