Johnstons of Elgin plunged into the red during 2020 as Covid-19 wreaked havoc across the luxury cashmere manufacturer and retailer’s key markets.
Results posted by the four-time Queen’s Award winner revealed pre-tax losses of £4.4 million last year, compared with profits of around £6.4m the year before.
Total sales for the latest period came in at £51.7m, down by around one-third year-on-year as the pandemic hit production and shut off retail channels for the globally-renowned brand.
2020 was, of course, a challenging year for the company, but one in which our employees performed admirably.”
Simon Cotton, chief executive, Johnstons of Elgin.
But the sharp fall in sales was exactly as the firm predicted this time last year as it counted the likely impact of Covid-19 on its 2020 balance sheet.
And Johnstons – established in 1797 on the banks of the River Lossie – said it saw out last year with a strong cash position and was enjoying a “very robust” recovery in 2021.
Announcing its latest full-year figures, the company added: “The firm’s key priority during the pandemic has been the safety and wellbeing of its workforce and customers.
“Strong action was taken to support teams as they rose to the challenge and adapted work systems in each of its four locations.
“The pandemic had a significant impact on sales during the year, with demand falling in all wholesale markets, resulting in long periods of store closures and disruption at
manufacturing sites.”
We came out of 2020 with a strong cash position, ready to support our private label customers and to continue our brand expansion.”
E-commerce was “a positive exception”, growing by 46% in 2020 versus the prior year.
Johnstons said it continued to invest in both its brand and new manufacturing
technology last year – and this had accelerated in 2021.
It added its “strong recovery” in 2021 was expected to deliver a return to profitability this year.
Although some export markets have been slow to recover and reduced international travel to the UK has affected branded sales in the home market, e-commerce “continues to perform well”, as do sales to Johnstons’ luxury brand partners, the company said.
Chief executive Simon Cotton said: “2020 was, of course, a challenging year for the company, but one in which our employees performed admirably, following our Covid protocols to keep each other safe and helping us manage the ups and downs of demand.
“We came out of 2020 with a strong cash position, ready to support our private label customers and to continue our brand expansion.
“We are now seeing opportunities for investment and growth. We are currently recruiting a number of new employees in our mills and retail stores, including for our new store at Kildare Outlet village, in Ireland, which opens in October.”
Family-owned Johnstons runs mills in Elgin and Hawick.
It has visitor centres at both sites, as well as retail outlets in Edinburgh St Andrews and London.
The company, which employs around 1,000 people, was recognised in the sustainable development category of this year’s prestigious Queen’s Awards for Enterprise.
Leading the way
Judges were impressed by its “360-degree approach to sustainability and leading the way in ethical manufacturing”.
The firm was also praised for its commitments to limiting environmental impact, animal welfare, people, and sustainable textiles manufacturing.
Johnstons already boasted three Queen’s Award successes for export achievement, landing those honours in 1978, 1994 and 2002.
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