Gear4music sales growth held back by capacity constraints
Online musical instrument retailer Gear4music has said it expects its full year EBITDA to be slightly below 2018's level following capacity constraints at its York distribution centre.
While total sales were up 41% to £48.7 million in the four months to 31 December, further growth was restricted due to the centre reaching maximum capacity in the peak trading period between Black Friday and Christmas.
Gear4music's chief executive Andrew Wass said: “This capacity limitation means that sales growth during the period has not fully compensated for the lower product margins as we hoped. We are already working on plans to further expand our UK distribution capacity ahead of our peak trading period next year and we are confident that this can be achieved by autumn 2019.”
Sales in the UK were up 36% in the four months while sales in Europe and the rest of the world rose by 47%.
During the period Gear4music increased its number of active customers by 47% year-on-year to 666,000.
Looking ahead Wass said: “We will continue to invest in building scale and improving our customer proposition with planned investment in our logistics, systems, products and websites. We have a clear strategy of targeted expansion and remain confident of the continued long-term growth opportunity alongside an expectation of a return to increasing profitability."
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