Profit at the group behind Wren Kitchens slumped to its lowest level since 2017 as its sales fell back from a record high and it shed 1,000 jobs.
The West Retail Group, which is headquartered in Yorkshire, has reported a pre-tax profit of £35.1m for 2023, according to newly-filed accounts with Companies House.
The total comes after the Wren Kitchens owner posted a pre-tax profit of £75.8m in the year before.
The last time the group posted a profit lower than its 2023 total was the £17.7m it reported in 2017. At the time, the firm’s turnover stood at £607.1m.
The new accounts also show that the group’s turnover fell from £1.25bn to £991.6m in the year.
The last time its turnover was lower than the 2023 total was the £938.2m it achieved in 2020.
The owner of Wren Kitchens saw its UK turnover fall from £1.22bn to £948.6m in the year but its sales in the US rose from £28m to £42.9m.
During the year the group sold its interest in online consumer electronics retailer, Ebuyer, while its headcount fell from 8,628 to 7,641.
Wren Kitchens owner hopes investments will pay off
A statement signed off by the board said: “As expected, following two years of exceptional growth, as demand surged post the global pandemic, the kitchen market experienced some normalisation in 2023.
“This situation was exacerbated by elevated interest rates and the cost of living pressures faced by all consumers.”
It added: “As part of the long-term business plan, the company has over recent years been investing significantly in its manufacturing facilities.
“In 2023 the company’s new state-of-the-art kitchen manufacturing plant in Barton-upon-Humber became fully operational and works have also been completed to the company’s bedroom manufacturing plant in Howden.
“These investments were necessary not only for the continued expansion into the UK retail market but also to give the business the necessary capacity to begin a push into new markets including the contract kitchen market.
“The additional manufacturing plant has allowed the business to spread its operations across multiple locations reducing the risk of disruption to our supply chain from an incident at any one site, again this was a key element of the long-term business plan as the business evolves.
“Inevitably, and indeed as identified in last year’s strategy report, multiple production sites and the significant additional capacity means that in the short term there is some duplication of costs until the volumes grow and the new plant can operate efficiently.
“Whilst this has not had an impact on the gross profit percentage, it has affected our EBITDA [earnings before interest, taxes, depreciation and amortisation]”.