E-commerce group Samarkand, which focuses on connecting Western brands with Chinese customers, has struggled to weather Beijing’s slowdown and said it will change its primary focus to the UK.
Revenue at the group decreased by three per cent to £16.9m in the year ended March 31, down from £17.5m in 2023.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell by 27 per cent year on year.
Samarkand attributed the loss to “challenging trading conditions in China” as well as “disruption [from] adjusting the Group’s strategy and operations in the market”.
Samarkand is a consumer brand owner and distributor, which operates a scale-up platform for niche, premium, multichannel, health and healing brands.
Brands include herbal apothecary Napiers the Herbalists, supplement line Zita West and probiotic supplements brand Probio7.
Sales of third-party brands in China declined around 18 per cent year over year, the company said.
“We do not see any short to mid-term improvement in the trading environment in China and will continue to adjust our portfolio and operations accordingly,” it added.
Samarkand said that China had “weaker consumer demand, increased competitive intensity, heavy promotional discounting, rising cost of sales and high levels of in-market inventory across the industry”.
Chief executive David Hampstead said: “I am pleased with the progress being made in shifting the business towards profitability and in defining the future direction of the Group as a scale up platform.
Once our goal of moving the Group into profit is secure we will focus on increasing investment behind the scaling of our owned brands and to selectively add to the portfolio in the future through acquisition.”
We remain focused on improving the underlying performance of the business, reaching profitability and increasing shareholder value.”
While China no longer defines the entirety of the Group’s activities it remains an important aspect of the platform and gives the Group a differentiated capability in offering niche brands the opportunity to reach Chinese consumers.”