Today’s news in brief-2/11/23

Sainsbury’s announced that it expects to hit the upper half of its full year guidance of between £670m and £700m despite seeing its statutory profit before tax drop 27% to £275m for the 28 weeks ended September 16, 2023. The supermarket attributed the fall in profit before tax to non-cash movements and one-off income from legal settlements in the prior year. The company’s underlying profit before tax was £340m, which was flat year-on-year. Sainsbury’s retail operating profit was £485m, up 2% compared with the same period last year.

Asos announced plans to mothball its Lichfield fulfilment centre in an effort to reduce costs after revealing widened losses in its latest financial results. This decision is expected to save around £20m annually and provide flexibility for potential sale or reopening based on capacity needs. The company aims to operate with reduced stock levels under its new commercial model, having already reduced stock by 30% in the past year and planning a further 16% reduction in FY24. Asos reported a pre-tax loss of £296.7m for the year ending September 2023, with revenues dropping 11% to £3.5 billion.

Kurt Geiger reported a 49% increase in EBITDA to £30m and a 31% rise in revenues to £329.5m for the year ended January 28, 2023. This growth is attributed to expansion in the UK and overseas and the success of the handbag business, which saw a 72% sales increase. Wholesale turnover rose to £70.1m, and wholesale EBITDA more than doubled. The brand also experienced a 171% rise in online sales in the US. Kurt Geiger plans to open six new stores in the US following the opening of 12 stores in the UK.

Castore announced new store openings in Grafton Street, Ireland, and Bluewater, the UK’s second largest shopping centre. This expansion is expected to create local job opportunities, with Grafton Street alone offering 15 new positions. Castore’s stores will feature their latest collections and teamwear for various sports. The brand recently opened a store at the Dubai Mall, marking significant expansion into the Middle East. Castore has opened over 25 retail sites in the past year and plans further expansion.

Zalando reported a 72% increase in EBIT to €23.2m during Q3, despite a 3.2% decrease in revenues and a 2.4% drop in gross merchandise volumes. The fall in sales is attributed to the warmest September on record in Europe, impacting autumn clothing purchases. The retailer is working on new content and storytelling formats, as well as a luxury boutique-style space to enhance the customer experience. The recent launch of B2B brand ZEOS aims to help brands and retailers manage their multi channel business. Zalando maintains adjusted EBIT guidance for 2023.