{"id":3898,"date":"2023-06-20T13:49:30","date_gmt":"2023-06-20T13:49:30","guid":{"rendered":"https:\/\/latestnews.top\/2023\/06\/20\/online-retailer-gear4music-falls-to-loss-amid-difficult-economic-backdrop\/"},"modified":"2023-06-20T13:49:30","modified_gmt":"2023-06-20T13:49:30","slug":"online-retailer-gear4music-falls-to-loss-amid-difficult-economic-backdrop","status":"publish","type":"post","link":"https:\/\/latestnews.top\/online-retailer-gear4music-falls-to-loss-amid-difficult-economic-backdrop\/","title":{"rendered":"Online retailer Gear4music falls to loss amid difficult economic backdrop"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"js-article-text\" wp_automatic_readability=\"81.573457394711\">\n<h2>Gear4music shares slip as retailer crashes to a loss after soaring costs beat back revenue growth<\/h2>\n<ul class=\"mol-bullets-with-font\">\n<li class=\"class\"><strong>Britain&#8217;s largest online musical equipment retailer declared a \u00a30.4m pre-tax loss<\/strong><\/li>\n<li class=\"class\"><strong>Cost-of-living pressures in the UK hit demand for discretionary consumer goods<\/strong><\/li>\n<li class=\"class\"><strong>Gross margins declined after the company cut stock and incurred higher costs<\/strong><\/li>\n<\/ul>\n<p class=\"author-section byline-plain\">By <a target=\"_blank\" href=\"https:\/\/www.dailymail.co.uk\/home\/search.html?s=&#038;authornamef=Harry+Wise+For+This+Is+Money\" class=\"author\" rel=\"noopener\">Harry Wise For This Is Money<\/a> <a target=\"_blank\" rel=\"nofollow noreferrer noopener\" href=\"https:\/\/twitter.com\/intent\/follow?screen_name=harrywisey&#038;tw_p=followbutton\" class=\"twitter-follow-author\"><span class=\"follow-author\"><\/span><\/a> <\/p>\n<p class=\"byline-section\"><span class=\"article-timestamp article-timestamp-updated\"> <span class=\"article-timestamp-label\">Updated:<\/span> <time datetime=\"2023-06-20T14:06:10+0100\"> 09:06 EDT, 20 June 2023 <\/time> <\/span> <\/p>\n<p> <!-- ad: https:\/\/mads.dailymail.co.uk\/v8\/us\/money\/moneymarkets\/article\/other\/para_top.html --> <!-- CWV --><!--[if !IE]><!--> <link href=\"https:\/\/scripts.dailymail.co.uk\/static\/mol-fe\/static\/mol-fe-async-bundle\/6.52.7\/articleDefer.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/> <!--<![endif]--> <!--[if IE]>\n<link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/1.17.0\/registration--.css\" media=\"screen\" rel=\"stylesheet\" type=\"text\/css\" \/>\n<![endif]--> <!--[if !IE]><!--> <link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/17.16.0\/registration--.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/> <!--<![endif]--><!--[if IE]>\n<link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/1.17.0\/all-ie8-9--.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/>\n<link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/1.17.0\/all1-ie8-9--.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/>\n<![endif]--> <!--[if !IE]><!--> <link href=\"https:\/\/scripts.dailymail.co.uk\/static\/mol-fe\/static\/mol-fe-sync-bundle\/8.35.1\/desktop.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/> <link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/17.16.0\/all--.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/><link href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/17.16.0\/all1--.css\" media=\"all\" rel=\"stylesheet\" type=\"text\/css\" \/> <!--<![endif]--><!--[if gte IE 8]><!--> <link rel=\"stylesheet\" type=\"text\/css\" media=\"screen\" href=\"https:\/\/scripts.dailymail.co.uk\/static\/mol-fe\/static\/mol-fe-fff\/2.4.1\/styles\/fff.css\" \/> <!--<![endif]-->  <!--[if IE 8]>\n\n<![endif]--> <!--[if IE 9]>\n\n<![endif]--> <!--[if IE]>\n\n<![endif]--> <!--[if !IE]> -->  <!--<![endif]--><\/p>\n<p>   <!-- SiteCatalyst code version: H.20.3.\n    Copyright 1997-2009 Omniture, Inc. More info available at\n    http:\/\/www.omniture.com -->  <\/p>\n<p>         <!-- End SiteCatalyst code version: H.20.3. -->  <!--[if IE]>\n\n<![endif]--> <!--[if !IE]> -->   <!--<![endif]--><!--[if IE]>\n  \n  <noscript><link rel=\"stylesheet\" href=\"https:\/\/scripts.dailymail.co.uk\/static\/gunther\/gunther-2159\/video_bundle--.css\"><\/noscript>\n  \n<![endif]--> <!--[if !IE]> --> <link rel=\"preload\" href=\"https:\/\/scripts.dailymail.co.uk\/static\/videoplayer\/7.0.0\/styles\/mol-fe-videoplayer.min.css\" as=\"style\" onload=\"this.rel=\" stylesheet=\"\" \/> <noscript><link rel=\"stylesheet\" href=\"https:\/\/scripts.dailymail.co.uk\/static\/videoplayer\/7.0.0\/styles\/mol-fe-videoplayer.min.css\" \/><\/noscript>  <!-- <![endif]-->   <!-- CWV --><\/p>\n<div itemprop=\"articleBody\" wp_automatic_readability=\"66.987870967742\">\n<p class=\"mol-para-with-font\">Gear4music slipped to a loss last year due to more challenging domestic economic conditions and extra costs from reducing inventory levels.<\/p>\n<p class=\"mol-para-with-font\">Britain&#8217;s largest online musical equipment retailer posted a \u00a3400,000 pre-tax loss for the 12 months ending March, compared to a \u00a35million profit the prior year.<\/p>\n<p class=\"mol-para-with-font\">Total revenue grew by 3 per cent to \u00a3152million despite cost-of-living pressures in the UK hurting demand for discretionary consumer products.<\/p>\n<div class=\"artSplitter mol-img-group\" style=\"style\" wp_automatic_readability=\"8\">\n<div class=\"mol-img\">\n<div class=\"image-wrap\"> <img fetchpriority=\"high\" decoding=\"async\" id=\"i-aecd45a5873fdfe3\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/06\/20\/13\/72323343-12213783-image-a-10_1687264061831.jpg\" height=\"422\" width=\"634\" alt=\"Result: Gear4music declared a \u00a30.4million pre-tax loss for the 12 months ending March due to more challenging economic conditions and extra costs from reducing inventory levels\" class=\"blkBorder img-share\" style=\"max-width:100%\" \/> <\/div>\n<p> <noscript> <img decoding=\"async\" id=\"i-aecd45a5873fdfe3\" src=\"https:\/\/i.dailymail.co.uk\/1s\/2023\/06\/20\/13\/72323343-12213783-image-a-10_1687264061831.jpg\" height=\"422\" width=\"634\" alt=\"Result: Gear4music declared a \u00a30.4million pre-tax loss for the 12 months ending March due to more challenging economic conditions and extra costs from reducing inventory levels\" class=\"blkBorder img-share\" \/> <\/noscript> <\/div>\n<p class=\"imageCaption\">Result: Gear4music declared a \u00a30.4million pre-tax loss for the 12 months ending March due to more challenging economic conditions and extra costs from reducing inventory levels<\/p>\n<\/div>\n<p class=\"mol-para-with-font\">The company had previously blamed weaker domestic trading on Royal Mail strikes delaying deliveries over the Christmas period, hot weather and the absence of Covid-related restrictions.<\/p>\n<p class=\"mol-para-with-font\">Sales were also impacted by the firm&#8217;s own-brand products experiencing stronger competition from Far East manufacturers selling into Europe through Amazon.<\/p>\n<p class=\"mol-para-with-font\">Because of slowing demand, Gear4music set about slashing stock, which it had built up the previous year for &#8216;precautionary and opportunistic reasons&#8217;, through price cuts and changing re-ordering levels.<\/p>\n<p class=\"mol-para-with-font\">Combined with elevated energy, labour and card processing costs, this contributed to gross margins declining by 220 basis points to 25.7 per cent.<\/p>\n<p class=\"mol-para-with-font\">Andrew Wass, chief executive of Gear4music, remarked: &#8216;Market conditions have continued to be challenging&#8230;and we are taking the appropriate and necessary actions to ensure our business is correctly configured, resourced and positioned strategically for long-term success.&#8217;<\/p>\n<p class=\"mol-para-with-font\">Following the release of its full-year results, <a target=\"_blank\" style=\"font-weight: bold;\" class=\"class\" rel=\"nofollow noreferrer noopener\" href=\"https:\/\/investing.thisismoney.co.uk\/quote\/G4M\">Gear4music shares<\/a> sank by 6.8 per cent, or 7p, to 95.5p on Tuesday morning.<\/p>\n<p class=\"mol-para-with-font\">Gear4music was one of the <a target=\"_blank\" style=\"font-weight: bold;\" class=\"class\" href=\"https:\/\/www.dailymail.co.uk\/money\/markets\/article-9712467\/Gear4Music-profits-rocket-371-Britons-turn-music-lockdown.html\" rel=\"noopener\">most noticeable lockdown retail winners<\/a>, as homebound consumers sought to keep themselves occupied by improving their musical abilities.<\/p>\n<p class=\"mol-para-with-font\">Purchases of guitars, digital keyboards and home recording equipment all grew significantly.<\/p>\n<p class=\"mol-para-with-font\">To capitalise on the boom, the company bought percussion instrument maker Premier Music, whose drums have been played by the likes of Sir Ringo Starr, Keith Moon and Phil Collins.<\/p>\n<p class=\"mol-para-with-font\">It also acquired audio-visual equipment seller AV Online and opened three new distribution centres across Ireland and Spain to boost its presence in mainland Europe.<\/p>\n<p class=\"mol-para-with-font\">Yet trading began to slow down as<a target=\"_blank\" style=\"font-weight: bold;\" class=\"class\" href=\"https:\/\/www.dailymail.co.uk\/money\/markets\/article-10207769\/Gear4Music-warns-profits-Brexit-supply-chain-issues-hit-sales.html\" rel=\"noopener\"> Britain&#8217;s departure from the European Union caused disruption to shipping<\/a>, and people started spending more time outside after Covid-related curbs were ended.\u00a0<\/p>\n<p class=\"mol-para-with-font\">For the last financial year, the number of Gear4music&#8217;s active customers fell by 6 per cent to 865,000, while website visitors dropped by 2.3 million to 26.5 million.<\/p>\n<p class=\"mol-para-with-font\">Even though the group&#8217;s consumer base, turnover and profits remain above pre-Covid levels, its share price has dived by more than 90 per cent from its peak of over \u00a310 two years ago.\u00a0<\/p>\n<p class=\"mol-para-with-font\">Chairman Keith Ford said: &#8216;Customer demand across our markets remains volatile and difficult to predict, reflecting the continuing impact of geo-political and macro-economic uncertainties affecting consumer confidence across Europe.&#8217;<\/p>\n<\/div>\n<p>            <!-- ad: https:\/\/mads.dailymail.co.uk\/v8\/us\/money\/moneymarkets\/article\/other\/inread_player.html --><\/p>\n<div class=\"column-content cleared\">\n<div class=\"shareArticles\">\n<h3 class=\"social-links-title\">Share or comment on this article: <\/h3>\n<\/p><\/div><\/div>\n<p class=\"mol-style-italic byline-section justify\">Some links in this article may be affiliate links. 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