Company says restructuring has helped to reduce losses.
Theo Fennell has announced its interim results for the six months ended September 30, with turnover down 8% at £4.94 million, said to be in line with its board expectations.
Highlights from the results show that losses have more than halved to £610,083, down from 2011’s loss of £1.39m.
The brand has, however, enjoyed an increase in its online performance, with sales jumping 176% while its wholesale sales were up 12%, with new overseas wholesale concessions launched in Kuwait and Azerbaijan.
Rupert Hambro, chairman of Theo Fennell, said: ““These results reflect the substantial cuts to overheads, which together with the restructuring of the business, have significantly reduced our losses for the period.
“The major focus of the business is to increase sales which will return the company to profit. We continue to explore exciting opportunities for Theo Fennell in overseas markets including the Far East, Middle East and eastern Europe.”
Hambro added that owing to a shift in the route of the brand – namely a focus on unique pieces and the launch of new collections – it is “better positioned for the future”.
Theo Fennell is said to be in ongoing discussions with EME Capital about a potential takeover of the business but says its immediate focus is the Christmas period and in the New Year.
Hambro said: “The company has performed encouragingly over the last six months. Despite sales being down 8% versus the prior year, the loss for the period has been more than halved, which is in line with our expectations, and is the lowest it has been for the past four years. We are therefore pleased with the progress that has been made. We do however remain cautious as we enter the Christmas trading period due to the continued economic uncertainty impacting the UK retail sector.”
The company said the bulk of its sales losses were during the summer months due to a reduction in international clients owing to the Olympics, while operations have evolved to focus on one-off designs such as its locket-style rings and sculpted brooches, both of which are said to have won it key press coverage.
The brand has also continued to extend its silver Meadow collection, part of its entry-level Alias range, and says it will also present new diamond jewellery collection in the spring of next year.
“We have continued the development of our website including the online store. Sales for the period were 176% ahead of the same period last year, albeit from a low base,” said Hambro. “Our online sales currently account for 1.4% of our overall business and we see this as a key growth area for the company.”
Looking ahead, Theo Fennell is expecting to push opportunities in new markets, and is said to be in discussion with distributors and potential partners in the Far East and Chinese markets. The Ukraine, Russia and Kazakhstan remain “good” markets for the brand, and it has recently opened a concession in Baku, Azerbaijan.
Hambro said: “The ongoing economic uncertainty continues to make discussions with new partners more protracted than we had expected but we hope to secure additional distribution outlets in the latter part of this financial year. We remain focused on appointing the right partners to represent the Theo Fennell brand.”
It appointed Frank McKay as a non-executive director in September, while Gavin Saunders, the brand’s finance direction, announced his resignation from the board as of December 7. Alasdair Hadden-Paton, current executive deputy chairman, will replace him. Theo Fennell continues in the role of managing director.