The scale of challenges facing the new management of Rotary’s UK parent organisation The Dreyfuss Group Limited were laid bare today as accounts published at Companies House show turnover plunging by over one third last year.
2016 sales totaled £18 million, down 33.4% from £27 million in 2015.
The group posted a full year operating loss of £6.5 million, a massive drop from an operating profit of almost £2 million in 2015.
A statement accompanying The Dreyfuss Group accounts said that sales fell because of a decline in consumer confidence following the Brexit vote.
Brexit was also blamed for the fall in gross margins from 50% in 2015 to 40% in 2016 as the pound weakened against the dollar.
2016 was a tough year to be selling the inexpensive watches in which Rotary specialises, with the value of sales across all brands at retail level falling by almost 13%, according to retail analyst GfK.
However, The Dreyfuss Group performed worse than competitors including Time Products, owner of Sekonda and Accurist, which saw sales dip by only 4% in 2016.
Fossil Group, by far the largest fashion and lifestyle watch company in the UK with sales of £124 million in the UK last year, saw turnover fall by 10%.
Rotary has been owned by Chinese conglomerate CWJ since 2014 and has made a number of changes to its senior management team this year.
The company’s CEO Victoria Campbell resigned in February with the company’s long standing sales director Annette Hill-Stewart taking interim control.
In August, the company’s multi-channel director Peter McKenna was promoted to the role of chief executive of Rotary Watch Ltd., and has been working on a turnaround plan since taking charge.
“These results reflect a difficult period for the business, however, we continue to take decisive action to adapt to the current challenging environment and to position our company for sustainable long-term growth based on profitable partnerships with our retailers,” Mr McKenna told WatchPro on the day the 2016 accounts were published.
“Through 2017, we have also made important changes to our organisational structure, supply chain, and product offering and will now strengthen our team to drive our three year strategic plan and deliver operational efficiencies,” he added.