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Gymshark slows expansion despite record sales

Person holding a cellphone displaying Gymshark Limited's logo with its business webpage in the background.

Gymshark has seen a major drop in profits, dropping from £27.8 million to £13 million.

The announcement follows a record performance in 2023, when the activewear company saw a 15 percent increase in sales to £556 million.

The increase was attributed to the quality and appeal of its products and the strong resonance of its brand. 

However, despite this impressive growth, the company saw a major drop in pre-tax profits, falling to £13 million from the previous year's £27.8 million. 

Gymshark's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), a key indicator of its trading performance, increased from £39.9 million to £45.3 million.

The Solihull-based firm has announced its intention to continue boosting revenue profitably and sustainably while developing products that appeal to its expanding customer base. 

Gymshark is venturing into wholesale through a partnership with Selfridges, launching a high-quality athleisure range named “Everywear.” 

Additionally, the company plans to open a pop-up store in New York for 12 months and expand into Dubai in the spring.

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Despite forecasting 2024 to be its "biggest ever year," Gymshark's founder and CEO, Ben Francis, acknowledged that the rapid expansion seen in previous years is unlikely to continue due to various challenges. 

It came after the company made significant cutbacks, reducing its administration staff by 170 and closing offices in North America, Hong Kong, and Mauritius.

While Gymshark's directors have tempered expectations for future growth, the company remains optimistic about its prospects, emphasizing its commitment to growth and improved profitability with clear plans. 

The company announced a new permanent store in London's Westfield Stratford, which is expected to open in the summer and create over 75 jobs.

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