Johnstons of Elgin profits fall 15% in FY22

Scottish luxury cashmere retailer, Johnstons of Elgin, has revealed that its profit before tax dropped by 15.3% to £3.3m in FY22, down from £3.9m in the prior year.

This is despite reporting “record” sales, which grew 26% on the previous year from £66.4m to £83.5m.

According to the retailer, its drop in profit was due to challenges in efficiency, which impacted margins and headwinds from cost inflation.

In a statement, the retailer said it was “encouraging” to see a strong bounce back in volumes post-Covid and noted that the company has rapidly recruited to meet the increasing demand and is training up its growing workforce.

Johnstons of Elgin said its outlook for FY23 is “positive” and forecast a return to profit growth, as well as further growth in revenue.

Chris Gaffney, CEO of Johnstons of Elgin, said: “Our excellent sales performance has resulted in some growing pains in 2022, but we have been very successful in building our capacity for 2023 and expect to see improved profitability this year. As well as our investment in skills and equipment to facilitate our growth, we are also investing in the Johnstons of Elgin brand.

“The trend for ‘quiet luxury’ that respects the intrinsic values of quality, heritage and creativity, with less of a focus on overt logos and branding, is in line with our positioning.”

He added: “We were delighted to become Scotland’s largest B Corp in 2023, reflecting our responsibilities to our people, communities and the environment, and we also published our first impact report for 2022.”

In August 2022, the business was bought by its former CEO, Simon Cotton, from seventh-generation owners Blair and Jan MacNaughton, for an undisclosed sum.