Main board migrant Slimma’s lengthy evolution from ‘private label’ to branded clothing business is proving fairly successful, despite tough trading in the clothing game. Five years ago, chief executive Stephen Thwaite decided to exit private label business, highly dependent on the high street, and where margins are under pressure, and focus on own-brand business. ‘With your own brands, you control your pricing and margin,’ he explained.

Today, the majority of sales are to independent and small store groups frequented by affluent customers seeking ‘occasion wear’, a far more resilient space to occupy than the cut-throat high street. Figures for the year to September were pleasing, revealing a 15.4% climb in pre-tax profits to £1.1m, on lower turnover of £23.2m (£25.9m), with the dividend held at 3.5p. Branded sales accounted for 81% of the total, and this year that figure should rise to 92% as the exit from private label continues.

Slimma is now focused on growing three major brands: Frank Usher and Peter Martin, both occasion-wear brands sported by soap stars and VIPs, and Contract Clothing, a mail order brands group with a legacy interest in private label. Two further brands – occasion wear brand Cattiva and ‘expensive lingerie’ brand Beau Bra – were added last year, a tricky period in which exports slipped by 4.7% in weaker European, North American and Asian markets.

2006 will see Slimma invest in its brands, possibly bringing others on board, and the effect on profits is yet to be gauged. By 2007, investors should start to see the fruits of that investment, and the unloved shares could find themselves back in fashion. Well worth adding to your portfolio.

Slimma	AIM	£0.89m	9.50p	0.00p
Click here for interactive charting
Other company articles:
Slimma			19/12/2007
Slimma			17/05/2007
AIM unbowed by Bowleven buckle			06/01/2006
Slimma			04/01/2006
Slimma			17/05/2005