Gear4Music reports loss despite sales rise

The York-based retailer has vowed to implement what it called “swift strategic and operational changes” after encountering “a number of operational and commercial issues” amid a challenging retail environment.

Gear4Music’s full year results to March 31 showed a growth in sales of 48 per cent to £118m and a rise in active customers of 53 per cent to 727,000. The firm, which listed on the AIM market in 2015, said it had £5m cash in hand which would be sufficient for it to deal with its objectives.

Andrew Wass, chief executive, said: “Alongside delivering strong revenue growth in the period, we have worked hard to implement a number of commercial and operational initiatives to address the previously reported issues. Our FY20 H1 focus is on improving gross margins and ensuring a robust operational infrastructure is in place ahead of our peak H2 trading period, and I am pleased to report these actions are already yielding positive results.

“We are confident that we have the right strategy, customer proposition, financial resources and focus, to overcome the challenges of FY19, and achieve our objectives of maximising customer satisfaction and delivering value to shareholders.”

Zoe Mills, retail analyst at GlobalData, said the firm’s sales performance was constrained by its distribution centre during the peak periods of Black Friday and Christmas, meaning that high sales volumes could not negate lower gross margins

She said: “The accelerating performance of its own range will ensure Gear4music can continue to grow its customer base through a more value-focused proposition targeting less-experienced musicians.”