According to newly filed documents, profits at erotic retailer Lovehoney have been halved as cash-strapped customers bought fewer sex toys.
The Bath-headquartered sexual wellbeing brand said rising living costs had led to a sharp decline in sales in 2023, with revenue falling to £101 million from £121 million the previous year.
Lovehoney’s pre-tax profit also halved to £12.7 million (£29.6 million) year-on-year, falling by more than half to £12.7 million (£37.6 million).
The company laid off more than 60 employees during this period, bringing the average monthly headcount up to 328 from 389 in 2022.
In a statement released to Companies House, Lovehoney said: “2023 continued to be characterised by a very difficult environment and consumer sentiment, as rising interest rates and high energy costs severely impacted consumers and therefore reduced demand for our products.”
“In this environment, the company focused on efficiency and profitability rather than trying to maintain sales.
“Gross profit was £37.7 million, down slightly to 37 per cent as a proportion of sales. As the year progressed, the company closely monitored costs, particularly marketing costs, to ensure it was generating the right return and maintaining financial performance as best as possible.
“Non-exceptional administration costs were £23.6 million compared to £24.7 million in the previous year as the company tightly controls its spending during a period of lower demand.
“EBITDA fell in line with the decline in revenue to £17.7 million, compared with £24 million in the previous year.”
How did Lovehoney’s competitors perform?
The seller of sex toys and lingerie Ann Summers reported a 4.5 percent increase in revenue to £104.6 million in the financial year ended 1 July 2023, from £100.1 million in the previous 12 months.
The loss before tax also improved, falling from just under £22 million in the previous year to £3.7 million.
The company behind online adult toy retailer Bondara reported a decline in revenue in the year to 31 March 2023, resulting in a drop in sales to £9.3 million from £11.3 million in the previous 12 months.
Pre-tax profit fell from £2.7 million in the previous year to £2.1 million in the same period.
