Johnstons of Elgin posts £305k loss after tough year for luxury market
The result marks a sharp decline from the £4.6 million profit the family-owned company posted in 2023.
Johnstons, a cornerstone of Elgin's economy for over 225 years, saw annual sales fall by 6% to £94.2m, down from £100m the previous year.
The company had flagged the slowdown in September when it announced jobs were being cut at its Elgin mill.
Newly filed accounts show that demand fell more sharply than expected in 2024, forcing Johnstons to restructure parts of its business and absorb increased overheads, including wage inflation.
Despite difficult trading conditions, there were bright spots. Its retail division performed strongly, growing its turnover by 4%.
The growth was fuelled by improved online sales and strong footfall at its flagship stores – including a new location at London's prestigious Burlington Arcade.
Managing director Johanna Wallace said the business entered 2024 expecting further growth, but demand quickly fell away due to global economic uncertainty and changing consumer behaviour.
'It took time to react to the subsequent downturn shift in the market, resulting in inefficiencies in our mills and some restructuring costs,' she wrote in the company's strategic report.
The firm said it expects the luxury market to stabilise over time, but that growth will likely be slower than in recent years.
'We continue to invest in additional capacity to meet future growth demands of our private label clients and the Johnstons of Elgin brand,' added Ms Wallace.
The Elgin-based manufacturer produces high-end cashmere and woollen garments, both under its own Johnstons of Elgin label and for major international luxury brands.
Products are made from start to finish in Scotland, with spinning, weaving, finishing and embroidery all carried out at its Elgin and Hawick sites.
Despite the downturn, chief executive Chris Gaffney said the company remains focused on long-term strategy. This includes investing £4.7m in capital projects, including expanding capacity at both mills and upgrading machinery.
Mr Gaffney also highlighted a £5.4m improvement in the company's cash position, driven by tight control over working capital.
'Following consistent growth averaging 25% per annum in the three years after the pandemic, the volumes that were forecasted for 2024 did not come to fruition due to the well-documented slowdown in the luxury market,' he said.
'Our cost structure is now aligned with our forecast for 2025 and we are budgeting for a return to profit this year.
'We expect the luxury market to return to more normal levels of growth in the coming years and are well positioned to benefit from our vertically integrated, made in Scotland, supply chain.
'Everything we sell is either woven, knitted or made into garments by our talented craftspeople in our own mills.'
Johnstons of Elgin currently employs 1,185 staff across its operations, with most roles based in Elgin.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time Out
an hour ago
- Time Out
The route map for America's fastest train linking NYC to L.A. will stop in these 8 major cities
A bold new plan aims to link America's coasts by high-speed rail—Delaware-based AmeriStarRail has proposed the "Transcontinental Chief," a privately funded passenger and freight train that will take you from Los Angeles to New York in under 72 hours, with service aiming to begin by 2026. While the company still needs to secure a partnership with Amtrak to begin, plans are already coming together, including the eight major stops the proposed train will make along the route. Starting from Hoboken Terminal—reachable from Manhattan via PATH or ferry—the train heads west, skipping Penn Station due to tunnel restrictions for Amtrak's double-decker Superliners. The first leg runs to Harrisburg, Pennsylvania, where a single-level section branches toward Philly and D.C. Next is Pittsburgh, PA and then Cleveland, OH. The halfway point is Chicago, IL, America's rail hub and deep-dish capital, where the Transcontinental Chief will link with other long-distance routes. Then it's across the plains to Kansas City, MO. Rolling into the Southwest, the train will stop in Albuquerque, NM, a desert gateway along Route 66. Finally, the journey ends at Union Station in Los Angeles, CA. The train will serve 54 cities in total, but these eight anchors form its spine. AmeriStarRail says the route would replace Amtrak's "Southwest Chief" and "Pennsylvanian" services and will add truck transport via a roll-on, roll-off system—turning the train into a "rolling rest stop" for long-haul drivers. Not everyone's convinced, however. Amtrak has publicly said the plan lacks a "fundamental business case," though AmeriStarRail insists it will share details under a non-disclosure agreement. If it launches, this could be the fastest, most scenic way to traverse the country. The company hopes to begin service on May 10, 2026, which just so happens to be National Train Day. Service would also begin just in time for the 250th birthday of the U.S. and just weeks before the 2026 FIFA World Cup—exciting stuff!
Belfast Telegraph
4 hours ago
- Belfast Telegraph
South Belfast to get new hotel and leisure development, while Ballymena gets bowling alley
Permission was granted for the 164-bedroom Andras House hotel, which will have a ground floor bar and restaurant at the junction of Botanic Avenue and Donegall Pass. The site for the new hotel is currently used as a surface level car park and retail and office unit. Andras House acquired the site at Botanic Avenue in 2023 for £1.7m and last year it confirmed it is to develop a 164-room hotel for YOTEL, a London-based hotel firm. The project is estimated to be worth £17m. The Planning Committee also approved an application for change of use from office space and storage at Adelaide Business Centre. It will become a leisure development with bowling alley, restaurant, indoor golf, children's soft play, VR zone and amusements, with parking at the site. MK5 Ltd first unveiled plans for the leisure complex in 2022 after buying the Adelaide Business Centre on Apollo Road in Belfast for £1.35m. MK5 is owned by Patrick Simpson, the developer behind Londonderry's Brunswick Moviebowl leisure complex. Planning documents show that the estimated investment in the new project, in addition to the £1.35m to acquire the site, will be around £3m, with the businesses expected to create about 30 jobs. Permission was also given for the erection of a drive through café at lands near Lidl supermarket and Olympia Leisure Centre on the Boucher Road. Other applications approved were a council application for street art on the façade of the former Belfast Telegraph building in Royal Avenue at Donegall Street. Councillor Ryan Murphy, Chair of Belfast City Council's Planning Committee, said: 'It's further good news for tourists and visitors to Belfast to have another major hotel development approved, this time — in the Botanic area. 'This new hotel will be close to shops, bars and restaurants and other local visitor attractions like Botanic Gardens and the Ulster Museum. 'It's also walking distance to the city centre and close to Botanic station which provides public transport links to the wider city and beyond including Lanyon Place and St George's Market and Titanic Quarter and SSE Arena and Titanic Belfast, among other great attractions. 'The Planning Committee also approved a new leisure complex on the Apollo Road, Boucher, with bowling alley, soft children's play area and indoor golf which is fantastic news for residents and families in the city.' Meanwhile, Mid and East Antrim Borough Council has granted planning permission for a new bowling alley at a cinema complex in Ballymena. A proposal by applicant Carngore Ltd of Thomas Street, Ballymena, for renovations and an extension to the IMC Cinema to accommodate a 12-lane bowling alley and amusement centre has been given the go-ahead. A planning report noted the premises at St Patrick's Link Road are located just outside Ballymena in 'an established leisure area' adjacent to the Seven Towers Leisure Centre. The report said: 'The proposal is to change the use of two existing cinema rooms to provide an amusement area, further change of the existing lobby area and small extension to provide a bowling alley. 'Given the established leisure nature of the site and distance from any residential development, it is considered that there will be no impact on residential amenity or human health and well-being." The report stated that NI Water has recommended refusal. However, there is no proposed change to the existing water and sewerage facilities. 'Given the extensive parking on-site and adjacent at Seven Towers Leisure Centre, there is no need for any additional parking or traffic assessments.' There is no amendment to the access, it was noted.
Belfast Telegraph
8 hours ago
- Belfast Telegraph
Mount Charles: a second generation family business putting its team's future first
It remains a leading facilities management company, founded in Belfast by Trevor Annon back in 1988. And it's now evolving into the next generation – with Trevor's sons Gavin and Chris leading Mount Charles into further growth and expansion, while ensuring its people are front and centre, and remain at the core of the business's success. That's been fuelled by the appointment of Mark Dorman in a new role as learning and development manager – building an ambitious leadership and mentoring academy to help team members excel and grow in their roles across the company. 'Business has been really good,' Gavin Annon says. 'We've been on a bit of a growth spurt again.' Mount Charles Group has evolved into a combined services solution which includes catering, cleaning, vending and multi scale events. They operate 350+ contracts in 1,000+ sites across the island of Ireland. Mount Charles now boasts 3,500 team members, and remains one of Northern Ireland's top 10 employers. But according to Gavin, it's aiming to increase team member numbers to more than 5,000 by 2030. 'For us, it's about making our people feel important,' Gavin says. 'It's about making them understand why they want to be here, whatever they want to do: part-time, full-time, or building a career. 'We can build on that and light a fire under that excitement – it's about getting up in the morning and making a difference and having a real impact.' Over the last four decades, it's expanded to include a bespoke events business, Craft Event Co, a casual recruitment agency, Werkit, corporate hospitality business (and joint venture with Yellow Door), Pan & Pour, and in 2023, acquired the Concept Group, a Belfast-based 'one-stop-shop' for facilities management companies. Gavin says Mount Charles eyes three core areas within the business, and the reasons for its success – great people, great service, and great future. 'If we attract and train exceptional talent, in turn, they should deliver a great service, and have a great future together,' he says. Mount Charles is taking its team and its development seriously. Mark Dorman joined the team last year, and has been instrumental in implementing a new learning platform across the business, which has been key for training new starts and maintaining the high standards expected of Mount Charles. And he's developed a Chartered Management Institute (CMI) recognised three-tier management training academy – key to the organisation's team development. 'We have introduced our mentoring and leadership academies, managers and aspiring managers begin with training at the mentoring level, and then they can progress to bronze and silver leadership levels,' Mark says. 'We were able to identify core skills which Mount Charles would need for its future leaders. 'It's been an amazing journey – showcasing the talent which is coming through the business.' The leadership academies are based on hands-on, reflective, on-the-job learning. 'It about showing people in this sector that there is a very clear career progression,' Gavin says. 'You may have someone working in cleaning who wants to become an operational manager, for example. We have a pathway to that trajectory.' Ensuring it remains a family business – with a wider family culture and atmosphere extending to its team – is key for Gavin and the wider Mount Charles business. 'It's the only reason we exist,' Gavin says. 'We have to maintain that as we get bigger and stay true to our values which are – do the right thing, take pride in what you do, have fun and grow together. These define us and tell the world we are one of a kind. 'We are not on a crusade for mass market domination. We are the only business out there which is competing with the very large ones. It's important that we remain strong and ensure everyone is on the same path and journey.' Mount Charles is focused on its contribution to wider society – ensuring it places environmental, social, and governance (ESG) front and centre of its strategy. It's also delivering key insights from some 45 of its executive committee, through to line managers. 'We have a duty around ESG, because of our size and scale,' Gavin says. 'It's not just a nice thing to do any more, it's now key, and it filters down to the suppliers which we work with. 'ESG is around 40% of our current strategy. When you can see the direct impact you are having it helps the company and the team – there's fulfilment in doing the right thing.' Mark says: 'We have signed up the Belfast Business Promise, and hope to move to member status.' That includes adopting eight pledges, helping the firm, and others, network, and play a bigger role within their community. 'It's about making strategic community partners,' Mark says. That includes working with local community groups, including USEL (Ulster Supported Employment). It's also heavily involved with industry organisations such as the IoD, NI Chamber, Belfast Chamber, CBI, and Ibec. And looking ahead towards further expansion and growth, Gavin says that will come through organic expansion, while Mount Charles is also actively looking at making a sizeable acquisition, to give it considerably more market share. 'It's not a race to a larger number,' Gavin says. 'We are a heavily people-orientated business, and can't function without them. 'What we are working on – and what Mark is focused on – is keeping our people for as long as possible, and investing our time in them. 'We are well on our way with our five-year strategy – developing our leadership academy and ensuring our team has a great future. We are also developing and adapting more integrated systems to make us more efficient. 'We will continue to keep pushing forward with our strategy over the next 12 months – keeping positive, and keeping on path. 'All-island growth is a priority. We aren't looking at new markets, but plan on becoming bigger, better, and stronger.'
