Cath Kidston Asia sales push profit surge
With booming sales, home-furnishing retailer Cath Kidston Asia posted a surge in profits for its latest fiscal year.
Know for its floral patterns, the UK brand saw its underlying profits bloom by 27.4 per cent to £9.3 million (US$12 million). Turnover increased by nearly 8 per cent to £129.2 million thanks to a 20 per cent increase in overseas sales, particularly in Asia.
“We’re having a good time across the board,” says CEO Kenny Wilson, noting the aesthetic of “pretty, feminine and floral” works well in Asia. “They also like the essential Britishness of Cath Kidston.”
Baring Private Equity Asia acquired a majority stake in the brand last October, buying out TA Associates.The Hong Kong-based investment firm identified the Asian markets as a key target for the brand, as it continues to expand in India and Thailand.
“Our growing international business helps mitigate the effects of the weaker sterling,” says Wilson. The company bought back its Japanese business in 2015, which has also helped with the pound fluctuating following June’s Brexit referendum.
Cath Kidston’s online business also performed strongly, with sales up more than 10 per cent for the year – an improvement from its operating loss of £2.1 million the previous year.
Wilson says the company has moved a “meaningful amount” of its product sourcing out of China and intro countries such as Cambodia and Vietnam to mitigate the need for price rises.
Kidston opened her first shop in London in 1993, selling floral tablecloths, tea towels and crockery. Within a decade the brand had expanded to 219 stores globally, including China, India and Thailand. The designer still owns about 11 per cent of the business, despite having stepped down as creative director in 2014.