Emma Bridgewater posts £1.4m loss amid soaring Hanley factory costs

Pottery giant Emma Bridgewater has posted a financial loss of nearly £1.4m as production costs soared at its Stoke-on-Trent factory. The Hanley-based company also blamed having to heavily discount its goods "to drive sales" due to fierce online competition as a reason for the financial hit, having made a £1.1m profit in the previous year.

Latest accounts published on Companies House show the firm recorded a pre-tax operating loss of £1,380,691 in the year up to May 2023. Emma Bridgewater - one of the largest pottery employers in the city - said "unbudgeted increases" at its Lichfield Street factory had impacted profits.

The latest annual accounts state: "Unbudgeted increases in factory raw material costs and energy non-commodity costs led to a higher than planned cost of production in the factory. In addition, a competitive eCommerce sales environment during the year meant we discounted further to drive sales, particularly in the Summer Sale. Both of these factors, led to a reduction in EBITDA (earnings before interest, taxes, depreciation, and amortization) versus the prior year, despite the strong sales growth."

To offset the downturn, the company confirmed that dozens of redundancies have been made - last summer and in February this year - while also bringing in a four-day working week for a temporary period. Emma Bridgewater employs around 400 workers across its Stoke-on-Trent and London operations as well as at Bicester Retail Village and Clarks Retail Village.

"During the summer of 2023 we reduced our factory workforce by around 40 people as the production requirement decreased," it states in the accounts. "We also went through a period of 10 weeks of short-time working at our factory in Stoke-on-Trent.

"In February 2024 a further 36 roles were removed and a further period of 10 weeks of short-time working at our factory in Stoke-on-Trent commenced. Additionally, we are currently reviewing the levels of pottery stock we hold versus our sales forecasts for the next 12-15 months."

Despite the operating loss, sales increased by nine per cent to £36.2m compared to £33.1m in 2022. "Web sales increased slightly, consolidating on the significant increase from the previous year," the accounts added.

"In addition to this, the wholesale and retail shops channels showed strong sales growth as they recovered from the pandemic years. Export sales grew significantly with Tmall Global marketplace sales in China leading the way."

Looking ahead, the company said: "We plan to actively progress our activities to ensure profitability in all market conditions. Given the current economic climate in the UK, US and China, and the complications of trading in Europe following Brexit, our focus is currently on reducing the fixed cost base of the company to allow us to respond more flexibly to changes in trading conditions."

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