Boux Avenue sales surge but it remains loss-making

By

Sandra Halliday

Published
Feb 9, 2023

The company that owns lingerie chain Boux Avenue has warned of “material uncertainty” about its prospects as a going concern in its latest accounts.

But the business, owned by former Dragons’ Den panellist Theo Paphitis, also reported a 43% leap in sales to £67.1 million in the year to the end of last March (and a 56.1% rise compared to the pre-pandemic year). The online business also maintained its growth. 

Despite the higher sales, the company said that “success in our product, development and marketing, which was a key factor in delivering growth as well as a realignment of a cost base to a collaborative approach with key stakeholders, resulted in the company delivering an EBITDA loss of £0.3 million”. This was a “significant improvement” on the equivalent £3.5 million loss in the previous year as well as on its performance pre-pandemic.

And it made a £1.5m net loss, although this shrank from a loss of £5.6 million a year earlier.

The retailer added that it remains cautious regarding the economic outlook and cost pressures on both businesses and consumers, but said the progress made over recent years, gives it “optimism for the medium-term future”. It said the fundamentals of the business have “vastly improved and it anticipates seeing it continuing as a growing and profitable business". 

But what about that “material uncertainty”? It said that the directors have received a letter of confirmation from Theo Paphitis that he’s "supportive of the company and intends to provide additional funding should this be required”. 

However, this isn't a binding commitment and therefore can't be guaranteed. The company has also obtained letters from related party creditors confirming their commitment to continue providing existing funding and have confirmed that they won't recall amounts due to them for at least 12 months. 

The operating plans and financial forecasts that have been modelled indicate that the company has sufficient cash headroom to meet its liabilities. But if the expected forecast growth in revenue falls significantly below expectations and actions taken to battle the tough conditions aren't achieved in full, it could require further funding. This is likely to be available but isn't guaranteed. That's where the material uncertainty comes in.

Paphitis concluded that he’s "more confident than ever of the success of view Avenue, especially given the progress made and response of our customers”.