After last year’s record figures, the parent company behind Wren Kitchens has seen its profits plummet to their lowest levels since 2017, with the company also reducing its workforce by more than 1000 people.
West Retail Group’s latest annual report, released this month, saw the company’s 2023 year pre-tax profits fall to £35.1 million. This is a reduction of more than 53%, significantly down from the previous year’s profits of £75.9m.
The last time West Retail’s profits were so low was before Covid in 2017. At that time, the group posted profits of just £17.7m.
The Group also saw a hefty decline in its turnover. In its latest figures, West Retail reports turnover of £991.6m – a decline of just over 26% on last year’s figure of £1.25 billion.
West Retail’s turnover hasn’t been this low since the 2020 annual report, when it reported a figure of £938.2m.
The company also says its employee headcount has reduced by more than 1,200 people. This time last year, the Group said it employed a total of 8,927 people, which has now dropped to 7,631. This means that 14.5% of its employees from the time of its previous financial results are no longer with the company.
In May of 2023, West Retail Group also sold online technology retailer ebuyer for an undisclosed sum. In the company’s financial report from before the sale, ebuyer employed roughly 200 members of staff.
Despite the lacklustre results, a company statement said that the Group’s directors are “satisfied” with the latest figures.
The statement continues: “As expected, following two years of exceptional growth, as demand surged post the global pandemic, the kitchen market experienced some normalisation in 2023. The situation was exacerbated by elevated interest rates and the cost of living pressures faced by all consumers.”
The statement also admits that Wren’s retail network expansion “slowed” during the 2023 year, and as a result, only two new showrooms opened in the UK, located in Kidderminster and St Helens.
As a justification, the statement says that company directors were focused instead on increasing Wren’s manufacturing capacity, which they felt was necessary to meet future demand in both the UK and USA.
According to the Group, this takes the total number of its UK retail showrooms up to 110. However, the directors acknowledge that this is, “less than half of the number of showrooms of [their] major competitors”. Accepting this, the statement continues: “There remains significant areas of the UK where the company has no presence and where customers cannot easily reach us”.
Aside from just the UK market, West Retail Group reported an overwhelmingly positive result for Wren US Holdings Limited, the retailer’s USA branch. Despite what the report refers to as a “softened” market for big-ticket items, elevated interest rates, and a cost of living crisis stateside, the company’s turnover increased by more than 50% in the US.
Wren US reported 2023 turnover of £42.9m, which is a huge increase over 2022’s figure of £28.5m. The company also said it had invested in its people and support services in the US, and had also opened seven more showrooms, bringing its North American total number to 13.
Wren first moved into the US in 2020, with the retailer now selling and installing kitchens to American consumers in four states: New York, Connecticut, New Jersey and Pennsylvania.
Looking to the future, the company’s directors say that they remain “confident in the Group’s strategy” and believe that it can continue to expand its kitchen operations “in the UK and beyond”.
The report adds that the company plans to re-fit all of Wren’s showrooms with its new bedroom products throughout 2024, and that it will continue pushing further into that market throughout 2025.
Earlier this month, Wren also announced a strategic partnership with Home Depot, one of America’s leading home improvement specialists, to operate Wren concessions within their stores.