Karen Millen to put up prices 5% but says consumers will not notice hikes
Karen Millen is to hike shop prices by 5% this year as the retailer faces soaring costs following the collapse of the Brexit-hit pound, with the company also embarking on a strategic review.
Chief executive Beth Butterwick told the Press Association Karen Millen is grappling with the same challenges as its peers, namely uncertainties around Brexit, the increase to the living wage and currency fluctuations, which have made imported materials more expensive for UK firms.
She claimed shoppers will not notice the subsequent price hikes since the top end and entry level price ranges will largely be shielded from the blow.
"Our prices are going up about 5% in the autumn overall, but that's from an internal point of view. From an external point of view, entry and exit, I don't think the consumer will feel any different.
"It's about the prices at the mid-market where you can put some up, and there's still an option there for consumers to have different price points."
Even if some shoppers are turned off by the hikes, Ms Butterwick, who joined Karen Millen last year after five years as chief executive of Bonmarche, said the effects of subdued global growth and the extended oil price downturn is likely to send higher-end shoppers to its stores.
"Consumers might scale down from luxury to premium, which is what we are," she said.
"So I think there is an opportunity for us certainly to capture consumers that perhaps once shopped in luxury and now want the quality but maybe the average disposable income has come down slightly."
The retailer, which is majority owned by failed Icelandic bank Kaupthing, is now embarking on a review of its global footprint, comprising 234 stores, some of which could face closure.
"It might be that we retract in some markets and we expand in others, and we're going to go through that process and review over the next few months.
"My role is very much focused on delivering the global strategic plan. I've been brought in head down to create the vision and the plan and deliver it."
However, Ms Butterwick said that she was not aware of any high-level plans that would results in mass store closures or put jobs at risk.
Instead, Karen Millen is aiming to "redefine and strengthen" its presence in the UK market, which is made up of 40 standalone stores and 73 concessions, and is home to 600 of its 1,200 global employees.
The retailer will be poised to deploy that strategy by the end of the year, she said.
Reports emerged last year suggesting Kaupthing was eyeing a potential sale, but chief executive Paul Copley said: "Kaupthing is under no pressure to sell Karen Millen and indeed it is not for sale.
"We are very focused on supporting the relatively new management team at Karen Millen in delivering its exciting long-term growth plan, which we consider is in the best interests of the business, Kaupthing and our shareholders."
Karen Millen's strategic review comes after the company reported a £10.5 million loss for the 12 months to February 27 last year, up from a £9.8 million loss a year earlier, according to accounts filed at Companies House.
Sales also dipped from £178 million to £161 million.
Karen Millen is expected to release annual results for the year to March this year by the autumn.