Profits are set to bounce back at a Leicestershire-headquartered women’s fashion company behind the Wrap and Poetry brands by the end of 2020 after the Covid-19 pandemic encouraged a spike in online sales.
Selective Marketplace has revealed its cash balance is also set to improve as it “dramatically” cut its advertising spend.
The forecast has been included in new documents for the Rothley company’s year to 31 December 2019 in which its turnover went from £42.2m to £41.3m and its pre-tax profits from £5.6m to £3.5m.
A statement signed off by the board said: “2019 was a busy and challenging year but one from which we emerged in a stronger position to face the challenges ahead.
“We acquired a plot of land and built a new warehouse and head office.
“The new building, which opened at the beginning of 2020, will lead to a significant improvement in our operational efficiency, enable us to bring the call centre function in-house leading to improved customer service and give us capacity for future growth.
“Also during 2019 we opened our second London store.
“Market conditions were tough in 2019 with continued economic and political uncertainty, but in spite of this our sales were stable thanks to the strength of our brands and the loyalty of our customer base.
“Profitability was good but reduced year on year due to a number of factors including cost price inflation and increased advertising costs.”
On the Covid-19 pandemic, the business added: “With the exception of our two London shops, our business has remained open throughout the whole of the lockdown period.
“We have been able to dramatically reduce our marketing costs by cutting back on catalogue mailing quantities and cutting digital advertising to a minimum.
“As the lockdown has continued, we have benefitted from a growth in online shopping.
“The net effect will be an increase in our profits for the year and an improved cash balance.
“The new warehouse has been instrumental in allowing us to operate efficiently and safely during this time.”