Gear4Music total sales down to £64.7m compared to strong previous year
Musical instruments retailer Gear4music has reported that total sales were down in its first half of the year when compared to the exceptionally strong previous year.
The York-based firm said total sales stood at £64.7m for the six months ended September 30, down 8 per cent from the same period last year. However, robust UK sales were in line with the previous year.
European sales were down 16 per cent due to post-Brexit challenges, the company said. New European distribution centres became operational in September 2021 to address those challenges.
Andrew Wass, CEO of Gear4music, said: "We are pleased to report that trading during FY22 H1 has been in line with the board's expectations which, as previously reported, was not expected to meet the same level of trading as during the exceptional FY21 H1 period that was significantly enhanced by Covid lockdowns.
"With a 280bps improvement in gross margin relative to FY20 H1, we are particularly pleased to have retained a large part of the gross margin upside achieved during FY21 H1, alongside strong two-year sales growth.
"Our previously announced new Irish and Spanish distribution centres have now become operational, which following the challenges of Brexit, we expect will positively impact our European sales during FY22 H2 by largely eliminating cross border shipments, and increasing the breadth, strength and capacity of our delivery proposition within Europe.
"The acquisition of AV Distribution, an online retailer of Home Cinema and HiFi equipment, is on track to complete by December 2021, which will significantly increase the group's addressable market size.
"Preparatory work to integrate AV Distribution is progressing well, and we expect to launch AV.com in January 2022 following our peak Christmas trading period.
"Whilst the musical instruments and equipment market is not immune to global supply chain issues and increased shipping costs, we are well placed to continue minimising the impact of this situation, having deliberately and significantly increased on-hand stock from £23.3m at 30 September 2020, to £30.4m at 30 September 2021.
"As such, the Board is confident that results for the full financial year will be in-line with consensus market expectations."
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