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UK fashion chain Fat Face posts solid result

UK fashion chain Fat Face has overcome challenging trading conditions and unseasonal UK weather to post a positive set of full year results.

Retail sales rose by £16.1million to £219.2 million,  although operating profit declined 8.2 per cent to £33.5 million owing to the weak pound.

Like-for-like sales growth was inflated due to weak comparatives the previous year, and with trading still tough in 2017 Fat Face must focus on improving its in-store experience and invest in more innovative visual merchandising in order to boost dwell time and conversion.

Fat Face is a lifestyle clothing and accessories retailer, based in the UK. It was founded in 1988 by Tim Slade and Jules Leaver as a business selling T-shirts at ski resorts.

While international revenue accounted for just 2.4 per cent (£5.2 million) of total revenue there is significant opportunity to expand further, especially in the US where it launched three stores last year.

Fat Face ended the year with 218 UK stores, but it wants to further expand its portfolio. However, with weak footfall continuing to hit the high street, offline clothing sales (physical stores and mail order) are not expected to grow until 2019, so it must take a considered approach.

Exploiting its online potential is imperative, with investment in its delivery proposition and a greater focus on personalisation important to remain competitive and drive up purchase frequency.

Fat Face benefited from strong sales over the 2015 Christmas period aided by its full-price stance, despite discounting being rife across the clothing sector. Fat Face’s success with its festive price promise, which continued in 2016, highlights how shoppers see value for money in the retailer’s full price proposition.

However, with price rises inevitable this year, Fat Face will need to emphasise its quality and design credentials to justify price hikes and maintain appeal.

  • Charlotte Pearce is an associate retail analyst with GlobalData.

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