Q1 sales almost tripled on the previous year’s turnover for the corresponding period and were ahead of budget.
The majority of sales are generated through the company’s wholesale activities. As such, sales tend to be seasonal and linked to the major optical trade fairs. In October, the company exhibited at Silmo Paris, which generated significant sales. However, a strategic decision to promote existing frames at the trade show and hold back new styles until early 2020 will allow the company to launch new designs at major shows in London, Milan and New York, expected to give a further fillip to future sales.
| £000’s | 2018/9 Q1 |
2019/20 Q1 |
2019/20 Q1 |
| Actual | Actual | Budget | |
| Total Revenues | 109 | 328 | 214 |
| Gross Profits | 53 | 174 | 110 |
| Gross Profit Margin | 49% | 53% | 49% |
| Overheads | 101 | 241 | 208 |
| Net Profit | (64) | (67) | (98) |
UK, USA, and France remain K&K’s three strongest markets; US activities were responsible for around 40% of the company’s sales. The company aims to use current funding to maximise its potential for growth in all markets through strengthening and widening sales rep and/or distributor coverage. The company has concentrated a large part of Q1’s marketing focus on increasing its US market presence.
Jason Kirk, CEO, recently completed a US recruitment campaign, hiring two new reps for the Midwest and South east respectively, two posts the company had found difficult to fill. The two new additions boost the company’s US sales team to six, working on commission-only, out of Kirk & Kirk’s Philadelphia office (soon to relocate to Minneapolis). The enlarged team provides full US coverage for the first time.
The company’s UK presence continues to be serviced by a UK based rep while France is covered by the recently contracted major distributor in the region.
Other export opportunities are being explored. The company has negotiated new distribution agreements in Spain, Portugal and Australia – and, embryonic accounts in Australia and Romania were discussed at Silmo Paris.
While December has historically been a slow month for sales, a major trade fare, 100% Optical London, in January will present an opportunity for the company to boost sales by introducing new frames. Larger shows held in NYC and Milan in the spring have previously been extremely successful for the company and this is expected to be the case again in 2020, with a strong presence at these shows and new designs on display. The improved production and delivery structures will enable the company to take advantage of orders from these shows more quickly.