Sweaty Betty Back in the Black After Strategic Overhaul

Sweaty Betty, the London-based activewear brand, has successfully returned to profitability for the first time in several years, according to its newly filed 2024 accounts at Companies House. This significant financial turnaround marks a pivotal moment for the company, which saw a considerable improvement across its key performance indicators, culminating in a positive net profit after a period of losses.

Despite a slight dip in overall turnover, which decreased to £140.4 million from £144.2 million last year, Sweaty Betty demonstrated a robust recovery in its profitability metrics. Gross profit saw a healthy rise to £74.5 million from £71.3 million. More impressively, the company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) swung from a loss of £4.52 million a year earlier to a strong profit of £7.48 million. This positive trend extended to operating profit, which moved from an £11 million loss in the prior year to a £3.57 million profit. Furthermore, profit before tax drastically improved from a £13.4 million loss to a £1.5 million profit, culminating in a net profit of £0.57 million, a stark contrast to the £10.55 million loss reported in the previous year.

A closer look at the geographic performance reveals varied results. UK turnover experienced a decline, falling to £111 million from £116.4 million, and US turnover also saw a reduction, dropping to £9.3 million from £13.5 million. However, the brand's operations in the rest of the world proved to be a strong growth area, increasing significantly to £19.9 million from £14.2 million. Despite the current dip in US turnover, Sweaty Betty continued its strategic investment in the region by expanding its physical presence with the opening of two new stores in key American cities: Chicago and Washington DC during the year.

The company attributed this strong recovery and return to profitability to strategic measures implemented following a major reorganisation in 2023. This reorganisation included the transfer of North American wholesale operations out of Sweaty Betty Ltd. The improvements were largely supported by an enhanced gross margin performance, more rigorous cost control mechanisms, and a substantial reduction in organisational exceptional items. These initiatives highlight a deliberate effort to streamline operations and enhance financial efficiency.

Owned by Wolverine Worldwide, Sweaty Betty's last profitable year was in 2021, which coincided with its acquisition by the American giant from founders Tamara and Simon Hill-Norton. Since then, Wolverine Worldwide has undertaken a comprehensive reorganisation of the business. The latest financial year also saw further restructuring reflected in job cuts, with the company's headcount reducing from 990 to 903. This strategic overhaul and commitment to efficiency have clearly paid dividends, positioning Sweaty Betty for a more sustainable and profitable future.