Paul Smith's fashion empire posts losses for fourth year in a row

Global clothing brand Paul Smith has been losing money since 2020. Photo: WWD

Paul Smith's fashion empire has warned of the impact of rising inflation as it records a loss for the fourth year in a row.

The company, which employs the 77-year-old designer, said sales across its global business rose 7.7% to £212.5 million in the year to June 30, 2023, year-on-year earlier, recovering to pre-pandemic levels.

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However, the company reported a pre-tax loss of £2.3m for the year as it warned of further potential cost volatility despite price stabilization in the second half of the year. The company has been suffering losses since 2020.

“The business has recovered quickly but, like other retailers, continues to face challenges including the impact of rising inflation and low consumer confidence,” the company said in a statement. company documents.

He added that the ongoing war in Ukraine was affecting the business and increasing its costs.

Paul Smith previously operated several franchised stores in Russia that remained open for a long time part of 2022 after Russia invaded Ukraine.

However, Sir Paul ordered the stores to close in February 2023, admitting the company had made a «mistake» in allowing them to continue trading. It followed criticism from MPs and campaigners, some of whom called for Sir Paul to be stripped of his knighthood.

Paul Smith's company reported a pre-tax loss of £2.3 million for the year as it warned of a sharp rise in inflation. Credit: Dave Bennett

The company said it continues to monitor the situation in Russia and Ukraine, as well as the consequences of the war between Israel and Hamas.

Founded in 1970, Paul Smith is one of Britain's most renowned men's fashion brands. His designs have been worn by celebrities such as Lewis Hamilton, Justin Bieber and musician John Legend. The company is known for its distinctive striped and patterned fabrics, which are often used to line its suits.

In his latest reports, Paul Smith said demand for tailoring had increased and noted an increase in footfalls to high street stores and airports as people returned to city centers and the tourism industry recovered from the pandemic.

The company started from one small store in Nottingham, but today sells in more than 70 countries. Sir Paul, whose net worth was £242 million in 2020 according to the Sunday Times Rich List, received a CBE for services to fashion in 1994 and was knighted in 2000.

Beyond clothes , he collaborated with Mini to develop a unique car design and developed a custom Defender for Land Rover.

The company faced a lockdown in 2020 when most of its outlets around the world were ordered to close.

Sir Paul told The Telegraph at the time: “There have been many problems in my fifty years, but I must admit that none have been as devastating as this.”