Fat Face has renegotiated its debt terms to offer the business more “material headroom” after the weak pound dented the retailer’s full-year profits.
The fashion retailer reported a 9% drop in EBITDA in the 52 weeks to May 28, 2016 to £22m, which it attributed to currency fluctuations and the weak pound.
The retailer’s sales increased 7.2% during the period to £220.2m, driven by a 20.6% jump in ecommerce sales, which accounted for 18.2% of the business’s overall revenue.
Fat Face operates 225 stores across the UK and Ireland and added a net eight new stores during the period, increasing its bricks-and-mortar space 11.8%, with plans to further expand its estate in the coming year.
The retailer said it expected “some inflation in the clothing market” as the fall-out of Brexit impacted sourcing costs and consumer confidence.
The retailer also renegotiated terms on its £149m debt with its lenders in January as a means of securing greater “material headroom”, which it said was a “prudent and proactive” response to the fall in the value of sterling.
Fat Face’s international revenue was flat during the period at £4.9m.