THE managing director of Johnstons of Elgin has spoken of his disappointment over the company’s losses last year, but says they’re confident of future growth.
Mill chief Nick Bannerman was speaking after accounts published by Companies House revealed that the family-owned firm fell to a pre-tax loss of £1.8million in 2012, compared with a profit of £2.6million in 2011, as turnover dropped from £51million to £46million. The tumble in sales has been blamed on last year’s warm winter and “sluggishness” in key markets, but Mr Bannerman says there is no need for concern.
He told the Hawick News: “Obviously our financial results to December 2012 were a disappointment for the company but were mainly based on a drop in UK-based sales from our weaving division in Elgin.
“However, we remain financially strong as a company and have been much busier this year, and these facts, coupled with the appointment of a new operations director, a new creative design director for the business, and a new chief executive in Elgin, mean we feel well placed to take the company forward strongly into 2014 and beyond.”
The firm, which employs 800 people, declared that 2013 had “seen a significant recovery” and that turnover was expected to exceed £50million again in the current financial year to end-December.
The company noted that the relatively mild winter of 2011/12 in the UK had followed cold winters in 2009/10 and 2010/11.
Writing in the accounts, the directors of James Johnston & Co of Elgin say: “2012 was a challenging year for Johnstons. A mild winter in many of our consumer markets in 2011/12 resulted in high carry-over stocks being held by many customers and reduced orders to us through 2012.”
But Mr Bannerman says the key to the company’s continued success is to embrace the luxury end of the market, adding: “We will also continue to push our own Johnstons of Elgin branded collections, ensuring we give the best service possible to our customers across the globe and at margins that allow us to grow and prosper.”
He added: “Nobody ever said manufacturing was an easy business to be in and we certainly know we can perform better than we’ve done of late.
“Cashmere fibre prices are rising so there will be further challenges to come, however we have tremendously skilful and experienced people throughout the company allied to a real passion for making cashmere and fine woollens here in Scotland, and remain confidentthat Johnstons still has great potential for further profitable growth.”