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Gear4Music suffers as UK costs crisis hits demand

Gear4music says its full-year sales and earnings are set to fall slightly short of market expectations as consumer confidence and international sales weaken.   Shares of… View Article

ENTERTAINMENT

Gear4Music suffers as UK costs crisis hits demand

Gear4music says its full-year sales and earnings are set to fall slightly short of market expectations as consumer confidence and international sales weaken.

 

Shares of the York, northern-England based company fell as much as 28% after it said full-year revenue and Ebitda would be “slightly lower” than consensus expectations. The firm’s market value now stands at about £55 million pounds.

 

The business has previously said its sales were affected by Brexit-related challenges in 2021, a year in which the new Trade and Cooperation Agreement between the UK and the European Union introduced new bureaucracy including customs checks.

 

Today Gear4music said in a full-year trading update that it expected sales to come in at £147.6m in the year to March 31 2022 – 6% down on last year, but 23% ahead of two years ago.

 

While UK sales have continued to grow at a slower pace than during the pandemic, its sales in Europe are almost a fifth lower than the previous year.  

In the UK, full-year sales stand at £82.6m – 5% higher than the previous year, and 34% ahead of two years ago.

 

Sales in Europe and the rest of the world are expected to come in at £65m – 18% lower than the year before but 11% higher than in 2020. EBITDA is expected to come in at £11m – down from £19.8m last year but ahead of the £7.8m it reported in 2020. 

 

Looking ahead, Gear4music says it now has strong levels of inventory across its distribution centres – including in Europe – that should support sales in its current full year. It is also looking to sales from its new specialist audio-visual equipment business AV.com, and will invest in ecommerce platform upgrades.

 

Gear4music chief executive Andrew Wass, said: “We believe we have the right operating structure to continue accelerating our market share gains and remain confident in our medium and long-term profitable growth strategy. We look forward to providing further details of our progress when we publish our full FY22 results in June.” 

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