Registered number:
For the Year Ended
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Vogue Sourcing Limited
Company Information
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Vogue Sourcing Limited
Contents
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Vogue Sourcing Limited
Strategic Report
For the Year Ended 31 December 2023
Introduction
The directors present their Strategic Report and audited financial statements for the year ended 31 December 2023. Principal activities The Company’s principal activity is to design, source and sell clothing in the fashion sector B2B. At the heart of our success in the fashion sector lies our commitment to design excellence providing the consumer high-end quality products at a competitive price. There have been no changes in the principal activities. Our talented and creative design teams have consistently delivered innovative and stylish collections that resonate with our target audience. We will continue to prioritise design innovation as a core aspect of our business strategy, ensuring that our products remain at the forefront of fashion trends. Business review As we reflect on the financial year ending on December 31, 2023, it is key to evaluate the performance and financial standing of our company. 2023 saw a decline in sales due to the loss of a manufacturer led account. Sales for the year totalled £95.7m, down 11% year on year, although our FOB (Free On Board) sales achieved a 24% year on year growth, this reflects the trust and confidence that our partners and customers have in our products and services. We have consistently invested in our systems, reinforcing our commitment to staying at the forefront of the industry. These investments have not only enhanced our operational efficiency but have also enabled us to explore new opportunities, positioning us for continued growth in a rapidly changing business environment. Revenue Current year turnover is split between the two revenue streams; FOB sales of £83m (2022: £67m) and Manufacturer-Led sales of £12.7m (2022: £40.5m). Increased FOB revenue of £16m, this is a combination of successfully diversifying into new areas throughout menswear and non-clothing. Throughout the year, we have witnessed growth in sales and profits across all key departments. This underlines our ability to adapt the FOB products to the changing market, expand our product offerings, and deliver exceptional value to our customers. During the year, we identified that we will be losing a key revenue stream due to the discontinuation of a manufacturer led agreement with our key customer. This revenue stream has been an important contributor to our financial performance, and its loss is not something we take lightly. • Financial Impact: This revenue stream contributed approximately 40% of our total revenue. We have conducted a thorough assessment to understand the implications for our overall financial health. • Operational Adjustments: We are evaluating how to best reallocate resources that were previously tied to this revenue stream. This may include adjusting our budget, optimising operations, and potentially restructuring certain aspects of the business. Our Response Strategy We are already taking proactive steps to mitigate the impact of this loss: • New opportunities: We are exploring new opportunities by entering new departments for our current FOB business. • Innovation and Improvement: We are committed to innovating within our existing offerings to better meet market demands and strengthen our competitive position. • Cost Management: We are reviewing our expenses to identify areas where we can improve efficiency and reduce costs without compromising our core operations.
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
Business review (continued)
Gross profit Gross profits were £12m for the year ended 31 December 2023 (2022: £13.7m) and Operating profit totalled £1.4m (2022: £4.5m). Despite an overall increase in FOB revenue, gross profits have reduced due to a change in sales mix caused by the loss of our manufacturer led account. Administrative expenses increased by £1.5m as we invest in resource to penetrate new FOB departments for our current customer base. EBITDA EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) totalled £1.6m (2022: £4.7m), reflecting a year where FOB sales grew whilst manufacturer-led revenue decreased (as noted above), and investments were made within the business to help generate future growth. The combination of FOB sales growth and forward-looking investment positions us for continued prosperity in the years ahead. Sourcing and Investment The Company has continued to invest throughout 2023 for the future growth plans. A strong team in the UK and globally is essential for implementing our growth strategy, and we are committed to empowering our employees with the resources and support necessary for their success. Efficient and strategic sourcing has been pivotal in maintaining our competitive edge. The directors view responsible sourcing as essential to the company's sustainable growth. Year on year we have strengthened our relationships with suppliers and manufacturers that uphold our values of quality, sustainability, and ethical production. Acquisition by Vogue Sourcing Holdings On June 12, 2023 Vogue Sourcing Limited was acquired by Vogue Sourcing Holdings Ltd, following the decision of one of the shareholders to exit the business. The acquisition was structured to facilitate a smooth transition of ownership whilst ensuring the continued growth and stability of Vogue Sourcing Limited. The acquisition has led to several changes in the ownership and governance structure of Vogue Sourcing Limited: • Ownership Structure: Vogue Sourcing Ltd is now a wholly-owned subsidiary of Vogue Sourcing Holdings Ltd. • Management Team: The existing management team will continue to lead the business, ensuring continuity and stability. The financial implications of the acquisition were as follows: • Purchase Consideration: The acquisition was completed for a total consideration of £16.8m, which was funded through cash totalling £3m, with a share for share exchange totalling £13.7m, plus legal costs of £0.1m. Vogue Sourcing Limited is expected to continue its growth trajectory, with plans to expand into new markets and launch new products.
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
Global Territories
We source across six territories worldwide, each at different stages of development. The varying economic conditions in these regions have a direct impact on our UK-based business. As a UK business, our success is closely tied to the economic health of these diverse markets for sourcing, requiring us to adapt our strategies to each region's unique economic landscape. Some of the territories have been under significant economic stress, resulting in increased operational costs and tighter profit margins. As a business we have had to reassess our pricing strategies and optimise resource allocation. Turkey In 2023, Turkey's economy faced significant challenges and shifts. The country faced high inflation, reaching rates above 40% driven by unorthodox monetary policies and a depreciating lira in the year. Our Turkey office was a large contributor to our manufacturer led business, which has now stopped. With regards to our FOB business, revenue associated with clothing sourced from this territory has reduced to £7.5m in 2023 (£9.5m: 2022) with further reductions in revenue predicted in the following financial year. Morocco Ongoing investments have been made during 2023 in our Morocco office, which provides a different handwriting (CMT product) for our customer base. This territory operates on a CMT (Cut, Make & Trim) basis compared to FOB which requires more attention due to its complexities around sourcing of materials. We are now achieving necessary sales associated with sourcing product from this territory to sustain future growth. Due to the decline in Turkey, this office has become more important as a short-lead offering. Bangladesh factory unrest Bangladesh has seen a wave of factory protests, particularly within the garment industry, which is a crucial sector for the country's economy. These protests are largely driven by demands for higher wages, better working conditions, and the timely payment of salaries and bonuses. As a result of this, a proportion of Vogue Sourcing sales forecasted for November and December 2023 slipped into the following financial year.
Our KPIs are essential metrics that guide our decision-making and help us assess our progress towards our strategic objectives. Our directors and senior management team diligently monitor these KPIs on a regular basis to ensure that we stay on course and continue to excel in our industry.
• Sales Growth - This KPI measures our year-over-year sales performance, offering effective insights into our ability to increase revenue, expand our current customer base, and capture new market opportunities. It also reflects the business effectiveness in driving sales initiatives and adapting to market trends. Despite overall sales reducing, our main revenue-driving division has increased. • Gross Profit Margin - Our FOB profit margin KPI helps us assess the efficiency of our operations by tracking the percentage of profit earned from our revenue. It reflects our ability to manage costs effectively. The Company achieved a gross profit margin of 13% in 2023 (2022: 13%). • Customer Satisfaction - This is a crucial KPI, serving as a key indicator of our ability to meet and surpass our customers' needs and expectations effectively. The improvement of our customer service is monitored through on time delivery which has increased due to investment in the quality team. Quality has declined due to wrong factory choice and we are now consolidating the supply base. • Market Share - This KPI examines our share of the market compared to competitors. It allows us to assess our position in the industry and identify opportunities for growth. In 2023, the Company sold to 54 department of our main customer, an increase of 38% on 2022 (2022: 39 departments).
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
As we look back on the past years, it’s just as important to chart our course for the future by identifying the critical priorities that will fuel the business strategy and progress in the coming year. These priorities will play a vital role in shaping our business strategy and directing our initiatives. By dedicating our energy to these key areas, we are set to drive sustained growth, provide outstanding value to our customers, and reinforce our leadership position in the market.
• Market Expansion: Continuously seeking new opportunities to develop our presence globally by utilising resource and expertise overseas. We will continue to pursue new departments within current customers, combined with attracting new business through our quality driven innovative approach. In 2023, we have expanded into Morocco for another short lead time territory, and India to bring a different product offering. • Sourcing Expansion: Investment in IT and infrastructure to enhance our current overseas existence, enabling us to provide a seamless customer experience. We have also explored new territories that will strengthen our offering to the customers. • Product Innovation: Staying ahead of fashion trends and introducing new innovative product lines to meet the evolving needs and preferences of our customers, while maintaining the high-quality standards for which we are known. • Staff Development: Investing in their growth and development is paramount. In the coming year, we will focus on several aspects of staff development and implement initiatives that promote a positive workplace culture. Cost of Living Crisis As we move forward, it is essential to acknowledge the significant challenges posed by the ongoing cost of living crisis in the UK. The past year has seen unforeseen factors affecting households, creating financial strains for many. We have been closely monitoring the impact on people and their coping mechanisms during these turbulent times. As we navigate these challenging times, discussions and collaboration are essential. We encourage our employees, shareholders, and partners to share their insights, ideas, and feedback. Together, we can work towards creating a positive impact and supporting those affected by these economic challenges. We continuously monitor the situation as our customers will amend their pricing strategies based on the current economy. We remain flexible to satisfy partners at various pricing levels. This is an opportunity to become diverse in providing stylish fashion driven products at a variety of prices.
Enhancing our inhouse systems (UK and Globally) is an important process for our organisation. The aim being to enhance efficiency, streamline operations, and leverage technology for growth.
The prior year was a transitional year implementing various systems. This year we undertook significant enhancements to the systems and infrastructure, focusing on maximising efficiency and optimising output throughout the business. These investments were designed to support our growing operations, enabling us to deliver higher quality results with greater speed and precision. Protex: We have continued to advance the build and development of Protex throughout the year, considerably enhancing its reporting capabilities across our global operations. This expansion has provided senior management with greater visibility and consistency in our data, ensuring that information is accessible and comparable across all regions.
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
On a quarterly basis, the board reviews the principal risks and uncertainties facing the company. These assessments are key in helping us proactively manage potential challenges and make informed strategic decisions. Here are the key risks identified:
Concentration Risk Our proactive approach to diversification across sectors and supply bases underscores our commitment to mitigating concentration risk. We believe that this strategy positions us well to navigate the intricacies of the business environment and seize new opportunities for growth. Currency risk The primary foreign currencies in which the Company has exchange rate fluctuation exposure are the U.S. Dollar. The Company has cash inflows and outflows in these currencies and therefore managed the risk primarily through natural hedging. Currency risk is a significant consideration in our global operations. Our approach to managing currency risk primarily revolves around natural hedging. Natural hedging involves aligning our foreign currency revenues and expenses in such a way that they naturally offset each other. By doing so, we reduce our exposure to exchange rate fluctuations and minimise potential financial losses. Competition risk The Company collaboratively works with the highly experienced overseas teams and skilled suppliers to ensure the design team are bringing modern and fashionable products whilst remaining continuously competitive. We value the contributions of every team member and partner involved in this process. Financial Instability The global economic landscape remains uncertain, and financial instability can impact our business. We are focused on maintaining strong financial management, diversifying revenue streams, and identifying opportunities for cost savings. Talent and Workforce Attracting and retaining top talent is essential for our success. Talent shortages, skill gaps, and employee well-being are areas of concern. We are working on staff retention, competitive compensation packages, and initiatives to promote a healthy work environment. Supply Chain Disruptions Global supply chain disruptions continue to pose challenges, impacting the availability of materials, components, and logistics. We are actively working to enhance our supply chain resilience through strategic partnerships, alternative sourcing, and improved supplier relationships. Quality It has been a challenging year for the Company in terms of quality control. Uncharacteristically, we have experienced more quality failures than our internal KPI limit. We believe addressing these issues is crucial to regaining customer trust and improving our sales figures. Focusing on improving fabric & factory sourcing alongside more robust internal processes will improve service to our customers.
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
As we reflect on the remarkable journey we have undertaken as a company - it has been a year marked by significant achievements, robust revenue growth, and the strengthening of vital relationships with our valued customers and suppliers. These accomplishments are a testament to the dedication and hard work of the entire Vogue Sourcing team.
Revenue Growth: Our financial performance this year has seen substantial revenue growth in FOB, as we expand into new categories and countries that reflects our market strength and the trust our customers place in us. Customer and Supplier Relationships: Our commitment to building strong relationships with both our customers and suppliers has yielded remarkable results. These partnerships are the foundation of our success, and we are grateful for the trust and collaboration that define them. Throughout 2024 and as we trade into 2025, we are confident in our ability to capitalise on new opportunities and maintain our position as a leading player in the sourcing industry. Together, we will continue to reach new heights, overcome challenges, and create a business that inspires.
Directors' statement of compliance with duty to promote the success of the Company
The Directors of the Company, as those of all UK companies, must act in accordance with set of general duties. One of these duties, commonly referred to as the ‘s172 duty’, is ‘to promote the success of the company’. Part 1 of that duty requires directors to do so ‘for the benefit of its members as a whole’, and in doing so, to have regard to the following six factors: • the likely consequences of any decisions in the long term; • the interests of the company’s employees; • the need to foster the company’s business relationships with suppliers, customers and others; • the impact of the company’s operations on the community and the environment; • the reputation for a high standard of business conduct; and • the need to act fairly as between members of the company. The following paragraphs summarise how Directors fulfil their duties: Risk Management Vogue Sourcing continuously seek to increase long-term shareholder value by promoting sustainable growth and resilience in the sourcing practices. This involves reducing risks associated with environmental damage, labour exploitation, and supply chain disruption, which can impact profitability. For details of other principal risks please see page 5. Our People Our employees are our biggest asset. Having people who bring a diverse range of talents and perspectives, and who feel engaged in their roles is of paramount importance to Vogue’s long-term success. We are making sure that all employees are engaged in building the future of the company via monthly meetings where performance is reviewed and clear communication on future plans. We operate thorough induction plans and training for new team members and continuous staff development. Vogue is investing in wellbeing events for all staff which foster a positive work environment that encourages retention and satisfaction among employees. Salary sacrifice schemes have been introduced to all employees. We encourage regular feedback and suggestions from our employees and this is to be reviewed and considered at board meetings.
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Vogue Sourcing Limited
Strategic Report (continued)
For the Year Ended 31 December 2023
Business Relationships
Vogue Sourcing Limited specializes in sourcing high-quality fashion products and materials for global markets. The Company’s operational success relies heavily on strategic business relationships with key suppliers, and manufacturers. These relationships are central to ensuring supply chain efficiency, product quality, and timely delivery. These business relationships are integral to our company’s ability to deliver value to stakeholders. While they enhance operational efficiency and market competitiveness, the company acknowledges and actively manages associated risks to maintain long-term resilience and profitability. Engagement with customers Our customers are critical to the ongoing performance of the Company. Our team builds lasting relationships with current and potential customers, to understand their objectives and requirements. We monitor our customer relationships closely and request feedback on our performance and quality of the product that we design and arrange manufacture of, and quality of the relationship. The feedback we receive from our customers feeds into our management decision making and informs our corporate strategy. Community and Environment Vogue Sourcing recognizes its responsibility to support the communities where it operates and to minimize its environmental footprint. This commitment is integral to the company’s business strategy, fostering long-term sustainability and social impact. The company prioritises the procurement of environmentally friendly materials, such as organic cotton, recycled polyester, and low-impact dyes. We have implemented systems and processes to reduce paper waste in the headquarters. The company supports multiple local charities by donating unwanted clothes, making financial donations and also in national charity days encouraging the employees to take part. Stakeholders The board remains focused on ensuring all decisions align with the Company’s strategic goals and values, and in the best interests of the Company and its stakeholders. We continue to drive innovation and sustainability, support employee wellbeing and growth, and reduce our environmental impact. We remain committed to upholding the principles of Section 172(1) as part of our governance framework.
This report was approved by the board and signed on its behalf.
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Vogue Sourcing Limited
Directors' Report
For the Year Ended 31 December 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £1,006,560 (2022 - £3,710,474).
The Directors do not recommend a payment of a final dividend.
The directors who served during the year were:
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Vogue Sourcing Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
•Market Expansion: Continuously seeking new opportunities to develop our presence globally by utilising resource and expertise overseas. We will continue to pursue new departments within current customers combined with attracting new business through our quality driven innovative approach.
• Sourcing Expansion: Investment in IT and infrastructure to enhance our current overseas existence, enabling us to provide a seamless customer experience. We have also explored new territories that will strengthen our offering to the customers. • Product Innovation: Staying ahead of fashion trends and introducing new innovative product lines to meet the evolving needs and preferences of our customers, while maintaining the high-quality standards for which we are known. • Staff Development: Investing in their growth and development is paramount. In the coming year, we will focus on several aspects of staff development and implement initiatives that a positive workplace culture. Our People 2023 witnessed the remarkable quality of our team shining through. Their dedication, resilience, and unwavering commitment have been the driving force behind our successes. As we navigate challenges and embrace opportunities, it is the strength of our team that continues to inspire confidence and drive us forward. Together, we are achieving excellence and continuing to build on our USP. We would like to take this opportunity to thank the teams for unwavering dedication and hard work. The commitment and efforts have been instrumental in our success, especially during these challenging times. Together, we will continue to achieve our business goals and set new milestones for our organisation. Outlook As we look ahead, our confidence in the future of our business remains firm. We are confident about the opportunities that lie ahead, and we are committed to building on our successes. With a strong team, a clear vision, and a dedication to excellence, we are poised for continued growth and success. We are dedicated to the careful management of our business. Our commitment to prudent financial practices, responsible decision-making, and strategic planning will remain steady. By diligently managing our resources and operations, we aim to ensure the sustained growth and stability of our company.
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Vogue Sourcing Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
The principal financial instruments utilised by Vogue Sourcing encompass trade debtors, bank balances, bank loans, and trade creditors. These financial instruments play a fundamental role in funding and facilitating the company's day-to-day operations and financial activities.
The company's financial instruments are essential tools for managing its financial affairs, supporting operations, and achieving its strategic objectives. Proper management and oversight of these instruments are critical to the company's financial health and sustainability. Debtors The Company maintains strong relationships with all its key clients and has established credit control parameters. We work closely with our clients to agree upon appropriate credit terms, which we diligently manage. This commitment to credit control not only safeguards our financial stability but also fosters trust and transparency in our client relationships. Cashflow and liquidity The objective is to ensure continuity of funding and cash levels sufficient to meet the ongoing needs of the business. The policy is to smooth the cash management of the business and to arrange funding ahead of requirements, should it be needed. The Company finances its operations by a combination of equity, working capital and a bank loan. The Company undertakes short-term cash forecasting to monitor its expected cash flows against its cash availability and finance facilities. In addition to short-term financial planning, the group engages in comprehensive longer-term cash forecasting. This essential practice allows us to proactively monitor and assess our expected funding requirements, ensuring alignment with our current business plan.
At Vogue Sourcing, our dedication to innovation remains unwavering. We are committed to investing in research and development initiatives with the primary goal of adopting new product development. This strategic investment not only drives our competitiveness, but also propels us into the future of our industry. By employing the power of R&D, we aim to create beautiful, stylish products that meet the evolving market demands, exceed customer expectations, and position us as leaders in our field.
A summary of how the directors have had regard to the need to foster the Company's business relationships with suppliers, customers and others, and the effect of that regard, including on the principal decisions taken by the Company during the financial year, is included in the Strategic Report.
The Company has liaison offices in Bangladesh, Turkey, Morocco and China.
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Vogue Sourcing Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
Energy and emissions data have been calculated using the following:
- The Greenhouse Gas Protocol standard - UK Government’s 2023 GHG conversion factors for company reporting Includes activities relating to design, sourcing and logistics within the UK where applicable. The Company has taken measures to improve energy efficiency and reduce energy consumption through various projects including: - New printer network to reduce the amount of unnecessary printing and encourage a culture of 'think before we print'; users must enter a code on the printer before any documents are printed. - Cycle to work scheme and room share incentives are available.
Intensity Ratio
We have calculated our emissions intensity ratio based on turnover, providing a measure of emissions relative to our economic activity. This will allow us to track year on year improvements and measure the effectiveness of new energy efficiency initiatives. The intensity ratio of tonnes CO2e per £m sales revenue is 0.3 (Year to 31 December 2022: 0.21).
There were no significant post balance sheet events.
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Vogue Sourcing Limited
Directors' Report (continued)
For the Year Ended 31 December 2023
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Vogue Sourcing Limited
Independent Auditors' Report to the Members of Vogue Sourcing Limited
We have audited the financial statements of Vogue Sourcing Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Vogue Sourcing Limited
Independent Auditors' Report to the Members of Vogue Sourcing Limited (continued)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
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Vogue Sourcing Limited
Independent Auditors' Report to the Members of Vogue Sourcing Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The engagement partner's assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team's: • Understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation; • Knowledge of the industry in which the entity operates; • Understanding of the legal and regulatory requirements specific to the entity. Identifying and assessing potential risks related to irregularities In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: • The nature of the industry and sector in which the company operates; the control environment and business performance including key drivers for directors' remuneration, bonus levels and performance targets. • The outcome of enquiries of management, including whether management was aware of any instances of non- compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged fraud. • Supporting documentation relating to the Company's policies and procedures for: - Identifying, evaluating, and complying with laws and regulations - Detecting and responding to the risks of fraud • The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations. • The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. • The legal and regulatory framework in which the Company operates, particularly those laws and regulations which have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or which had a fundamental effect on the operations of the Company, including General Data Protection requirements, and Anti-bribery and Corruption. Audit response to risks identified Our procedures to respond to the risks identified included the following: • Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with the provisions of those relevant laws and regulations which have a direct effect on the financial statements. • Discussions with management, including consideration of known or suspected instances of non-compliance with laws and regulations and fraud. • Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities. • Enquiring of management about any actual and potential litigation and claims. • Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of material misstatement due to fraud.
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Vogue Sourcing Limited
Independent Auditors' Report to the Members of Vogue Sourcing Limited (continued)
We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or error. • Challenging assumptions made by management in their significant accounting estimates, and assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and • Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
Cheshire
SK1 3GG
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Vogue Sourcing Limited
Statement of Comprehensive Income
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Registered number: 11074230
Balance Sheet
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 35 form part of these financial statements.
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Vogue Sourcing Limited
Statement of Changes in Equity
For the Year Ended 31 December 2023
Statement of Changes in Equity
For the Year Ended 31 December 2022
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
The company is a private company limited by shares, registered in England and Wales with company number 11074230. The address of the registered office is 3rd Floor, Oakland House, Talbot Road, Old Trafford, Manchester, M16 0PQ.
The Company’s principal activity is to design, source and sell clothing in the fashion sector B2B.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Vogue Sourcing Holdings Ltd as at 31 December 2023 and these financial statements may be obtained from Companies House.
Functional and presentation currency
Transactions and balances
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
FOB sales Under these terms, the Company clears the goods for export and ensures that are delivered to and loaded onto the vessel for transport at the named port of departure. The Company recognises revenue at the point when the goods are loaded onto the transport vessel at the point of departure, which is the point at which the buyer takes over risk and costs. Manufacturer led sales The Company has manufacturer-led contracts with specific retailers, and in substance, acts as 'Principal' in such arrangements. The Company sets the 'Selling price' for which goods are sold for in-store and online, and recognises revenue based on the Selling price of each item sold. Revenue is recognised at the point at which the goods are sold in-store or delivered by retailers to the end consumer, taking into account that products despatched but then subsequently returned by consumers to retailers are not considered to be sold. The Company has inventory risk before or after the customer purchase, during shipping or on return. Under the terms of the contracts, the retailers are entitled to commission as a percentage of the price for which the associated products are sold for. Commission is accounted for as an expense within Cost of Sales.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
2.Accounting policies (continued)
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
The directors believe that judgements, estimates and assumptions do not have a significant risk of causing a material difference to the carrying amount of the assets and liabilities within the next financial year.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Analysis of turnover by country of destination:
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
11.Taxation (continued)
There were no factors that may affect future tax charges.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses.
The Company has contingent liabilities at 31 December 2023 totalling £4,536,850 (2022 - £10,013,401), in relation to letters of credit.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £74,234 (2022 - £47,864). Contributions totalling £1,266 (2022 - £25,106) were payable to the fund at the balance sheet date and are included in creditors.
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
For the Year Ended 31 December 2023, the directors entered into the following advances and credits with the company:
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Vogue Sourcing Limited
Notes to the Financial Statements
For the Year Ended 31 December 2023
At 1 January 2023, the company was controlled by A. Mehan, being the majority shareholder.
In June 2023, the entire share capital of the Company was acquired by Vogue Sourcing Holdings Limited, company number 14823320. The registered office of Vogue Sourcing Holdings Limited is 3rd Floor Oakland House, Talbot Road, Old Trafford, Manchester, M16 0PQ. Consolidated financial statements are available for Vogue Sourcing Holdings Limited and may be obtained from Companies House. The ultimate controlling party remains A. Mehan.
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