Sports fashion brand, Lacoste UK swung to a pre-tax loss of £3.269 million in 2023, even though the company’s turnover increased to £70.192 million during the year from £69.922 million in the previous year.

The brand also posted a net loss of £3.223 million for 2023, a reversal from the net profit of £1.846 million achieved a year earlier. Its retail revenue form boutique and outlet stores increased by a meager 0.3 per cent. This was despite the launch of a new global flagship store on London’s Regent Street in April 2023, aimed at enhancing the brand’s positioning and underscoring the UK’s importance to the French company.

However, the flagship’s impact was overshadowed by a weak wholesale performance, with wholesale revenues declining by 4.5 per cent. Lacoste attributed this decline to the challenging economic environment and the cost-of-living crisis, which dampened consumer footfall in physical stores.

Nevertheless, Lacoste maintained its focus on a premium strategy, emphasising partnerships with mid- to top-tier wholesale customers. The company’s gross margin remained steady at 44 per cent, avoiding significant markdowns despite the tough market conditions.

During the year, Lacoste UK acquired full ownership of Pentland Brands UK Distribution(PBUKD). A former licensed distributor of Lacoste footwear in the wholesale channel, PBUKD continued in this role for most of the year. In December, a sub-distribution agreement was signed, enabling Lacoste UK to take over as the distributor for Lacoste footwear in Britain and internationally starting from the Spring/Summer 2024 season. Under this arrangement, PBUKD earns royalties from Lacoste UK while the latter recharges service costs to PBUKD.

Additionally, Lacoste UK partnered with a third-party logistics provider to operate a new UK-based warehouse, which became operational in May 2023. This move aims to mitigate the financial impact of double import duties by eliminating the need to ship goods from the company’s European warehouse in France.