Rixo: Increased investment hits earnings yet international growth remains priority

British premium brand Rixo has filed its financials for the year ended June 30, 2024, during which an influx of company-wide investments impacted earnings, yet future plans remain positive.

Over the period, sales took a slight hit from 19 million pounds in the year prior to 18.7 million pounds. Rixo said “an uncertain market with subdued consumer spending in a period of difficult trading conditions” was the cause.

The company’s gross profit also marginally fell, dropping from 14 million pounds in 2023 to 13.8 million pounds. Its operating profit, meanwhile, lowered to 303,377 pounds, down from a prior 2.3 million pounds.

This made way for what Rixo said was a “short-term” reduction in its EBITDA percentage, which fell from 16.9 percent to 6.2 percent. This reflected an adjusted EBITDA of 1.2 million pounds, a decline on the 3.2 million pounds reported in the year prior.

Such impact came as a result of administrative costs associated with increased investments made by Rixo towards digital and brand marketing, as well as the opening of stores.

Following the refurbishment of its location on Marylebone High Street, Rixo opened a store in New York, the US, and is planning to debut another store in Kildare, Ireland. Both of these new sites are operating under newly established local subsidiaries.

The company also said that on June 30, 2024, it grew its team by 112 employees, which were added to various departments, such as marketing, e-commerce, retail and wholesale.

Looking ahead, Rixo acknowledged ongoing “challenging trading conditions” that have been triggered by a fall in consumer confidence and changes in buying habits. To mitigate those issues, the company said it intends to build on its UK and US business through multiple sales channels, including through the expansion of its retail portfolio. At the crux, its focus remains on “growing business profitability”, the report noted.