Alquemie Grip, owner of General Pants and Surfstitch, recorded a more than $2 million loss for the FY23 year.
👉 Background: General Pants first launched in 1972 and has grown to over 50 stores across Australia. In 2022, a private investment group called Alquemie Group acquired General Pants. It has also previously acquired Surfstitch, Ginger & Smart, and National Geographic stores.
👉 What happened: Over the past 12 months, Alquemie Group's revenue more than doubled, but its expenses grew even faster. As a result, it recorded a more than $2 million loss for the FY23 year.
👉 What else: Alquemie is hoping that FY24 will be stronger. But if not, it could be all over red rover for some of these brands.
💡When it comes to aggressive retail expansion, you need a careful balance of ambition and financial responsibility.
💡Expanding a business often involves insignificant financial risk. It often means spending a lot more money on marketing, acquiring business, and hiring new staff.
💡Alquemie's operating expenses doubled to just under $140 million for FY23. And, the risk with expanding too quickly is that the expansion can strain the company's resources or lead to debts that can't be repaid.
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