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Registered number:
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
COMPANY INFORMATION
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ADENA BRANDS LIMITED
CONTENTS
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
The Group’s financial results for the period covered by this review, from September 2023 through the end of August 2024, were disappointing and a step back from the prior year, with sales down (11)% and a pre-exceptional EBITDA loss of £(2.4) million. They reflected a challenging environment, with weak consumer demand and steep wage and other cost inflation, but also underperformance in several areas, and the results reflect both that underperformance and the investments made to turn the performance around.
During the period, as part of our ongoing turnaround efforts, we turned our focus to three underperforming areas: our Monsoon retail portfolio; our Monsoon childrenswear business; and several key international markets (the Kingdom of Saudi Arabia, Italy and Germany). The actions we took have addressed the underperformance, but they required investment and involved transitions that led to lower sales, significantly impacting our results for the period. These realignments are largely complete as we trade through our current fiscal year, and we are seeing the benefits. Despite these challenges, our core UK Accessorize business and our core Monsoon Women’s business (that together account for approximately 70% of sales) continued to perform well in a difficult retail environment. The strength of those businesses meant that we were able to absorb the cost of the above-mentioned realignments, continue to invest in our brands, and continue our multi-year program of core technology systems upgrades. In the current financial year that began in September 2024, despite continued weak consumer spending and a new round of wage cost increases, the Group is seeing positive results from the investments made last year and the continued strong performance of our core UK Accessorize and Monsoon Women’s businesses. At the time of writing, with 8 months of our current fiscal year complete (including our important Black Friday through Christmas and Ramadan trading periods, with our summer peak ahead) the Group has seen a return to sales growth, profitability and much better performance in the areas that caused such concern last year.
As noted, during the period we took actions on three underperforming areas.
First, within our Monsoon retail portfolio we continued to close legacy dual-format stores (older large-format stores that combine Monsoon and Accessorize in a single store) at lease expiration but paused our rollout of Monsoon boutique stores to give time to create a supporting outlet business and to test a revised shopping centre format and station and airport travel locations. As a result, our Monsoon retail sales for the period were lower than we originally planned as reduced sales from store closures outweighed new sales from store openings. Second, we realigned our Monsoon childrenswear business, rebuilding the leadership team and completely redesigning our childrenswear collections. Given the time required to design new collections and sell through existing inventory, we absorbed the impact of lower childrenswear sales and markdown costs during the period and absorbed the additional cost of investments in the new team and new designs.
Third, we took several actions on our international business. We transitioned our two largest international businesses during the period, moving to a new franchise partner in the Kingdom of Saudi Arabia, and transitioning away from a franchise partner to an owned subsidiary in Italy. In addition to the sales impact of not trading these markets to their normal levels in 2023-2024, the transitions came with significant costs. Both these transitions are complete as we trade the current fiscal year. In January 2025 we also closed a small trial of 5 Accessorize airport stores in Germany, and we have provided for some of the costs of the closure in the accounts for this period. This was a hard decision, but relatively weak German airport recovery post-Covid, together with wider economic headwinds impacted the profitability of the stores and the viability of turning the trial into a long-term position. The end of this trial has not impacted operations outside of Germany.
As noted above, these realignments to our Monsoon retail, Monsoon childrenswear business and international markets represented a significant investment during the period in expense and foregone sales. But they have
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
proved to be productive, and we are seeing the benefits in our current fiscal year. As with many turnarounds, and especially in the volatile and challenging retail environment we have seen over the past few years, initial plans need to adjust and course corrections are a necessary part of the journey. As a private company, with a profitable core business and without the constraints of debt, we are able to simply get on with improving the business and fixing issues where needed, with the long term health of the brands in mind.
During the period we opened 13 new Accessorize stores and refitted 4. With these new openings and refits, the majority of our Accessorize retail portfolio is now our latest store design, representing a significant step forward over the past three years. Our new stores have performed well and in line with our business cases, supporting our approach to expanding our footprint and continuing to invest in physical retail. During the year we opened two new Accessorize store formats, both of which have proved productive and are now part of our focus as we roll out new stores. A smaller, jewellery-focused store in London provides a template for smaller, higher-margin stores; and a larger format opened in Harrogate, with a full range of product including clothing and gifting, provides a template for larger, higher-revenue stores.
Our core Monsoon Women’s business continued its evolution, with improved product and digital expansion driving robust sales in a challenging women’s clothing market. During the year, in addition to expanding our owned and third-party digital partnerships, we opened several new Monsoon stores as we test formats with a broader future portfolio in mind. Our travel-focused format in Waterloo station provides a template for a higher-density store format with shopping centres and other travel formats in mind (including two London Gatwick locations that we opened in early 2025). And several outlet locations opened in the year provide a commercial foundation to support a broader full-price retail footprint. Finally, we continued our multi-year investment in our core operating and technology platform by upgrading our warehouse management system, aligned with a renewal of our distribution centre lease. This follows our successful transition of our ERP system the previous year and provides a contemporary platform that enables us to create efficiencies in our operations and build out new functionality to support our omni-channel experience across our brands (for example, the new express click & collect service recently deployed to our Accessorize stores).
Group sales for the year were £204.6 million, a fall of (11)% on the prior year. Sales were impacted as noted above by the actions taken on our retail portfolio, the realignment of the childrenswear business and the transition of the Group’s two largest international markets.
EBITDA was a loss of £(2.4) million and loss before tax was £(7.5) million, driven by the above-mentioned transitions as well as by significant cost inflation in the Group’s wage expenses, driven largely by the UK National Minimum Wage increases. Cash was managed well, with £14.9 million of cash and zero debt at year end. The complete results for the wider group companies, including Adena Brands Limited as well as its affiliate Middle-East venture, Monsoon Accessorize LLC, were sales of £218.7 million, EBITDA of £(2.2) million, and cash of £15.6 million.
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
The Group entered its new fiscal year in September 2024 in a similar environment to that experienced over the prior year, with continued headwinds from ongoing cost-of-living pressures and a weak retail sales environment for women’s and children’s clothing. However, as noted, after 8 months of our current fiscal year, the actions taken in the prior year have driven much improved performance and a return to growth and profitability. In the current fiscal year, the most significant challenges faced by the business are continued cost pressures, driven by increases in the National Minimum Wage, new employment regulations and increases in employer National Insurance contributions. We expect to manage those pressures by improving our store productivity, and via a renewed focus on managing our overall headcount and wage increases, and efforts around automation and the use of technology to drive efficiency in our operations, stores and digital business.
The Group strategy has five main elements: product and brand renewal; digital transformation; continued retail portfolio realignment and format expansion; international development via digital as well as retail and franchise partner expansion; and smart investment allocation as we modernize our operating and technology platform. The changes we have made to the business since its restructuring, and the changes we have made over the past year, have put us in a stronger position compared to where the business was pre-pandemic and pre-restructuring: we have more profitable stores and a range of new formats we can invest in; a much stronger owned and third-party digital presence; a better positioned and profitable international presence; a lower and more flexible cost base; and a contemporary technology and operating platform underpinning the business.
Above all, it is the strength of our product and our brands that will determine our success. We have made significant progress on our product offer and continue to invest, across our Accessorize business with new team members and an expanded offer, as well as Monsoon including the relaunch of our new childrenswear collections. Our brands are a strong advantage for us in a highly competitive retail landscape, each with their long heritage and established, unique handwriting, and a shared commitment to environmental standards and ethical trading. After a difficult year, our continued investment in the business is yielding improved results and we believe we are well positioned for the years ahead.
The following are risks and uncertainties which could impact the Group’s ability to achieve its strategic and operational objectives or embrace opportunities as they arise. They are broadly grouped as market conditions, cost and supply chain risks, liquidity risk and foreign currency fluctuations.
∙Market conditions – The Group constantly reviews and monitors its trading operations to ensure pricing and promotional strategies remain competitive, product design remains attractive whilst staying in line with the Monsoon and Accessorize brand values. The Group continues to manage actively and minimise its exposure to the high fixed costs, including those associated with retail store operations as well as central and shared costs, to ensure that it can remain profitable and react to changes in the external environment. Whilst market conditions continue to be uncertain because of the lingering impact of the coronavirus pandemic and potential disruption from further variants, the Directors believe that the strength of the business’ restructured and more flexible retail portfolio, its digital channels (which now contributes over half the revenue in the UK), its stronger international position, and a much leaner and more variable cost base will ensure that the Group is well-positioned to mitigate risk, as has been proven to date
∙Cost and supply chain risks – The challenges of rising inflation as well as supply chain disruptions are factors that the Group manages constantly. Thus far, the Group has been able to negotiate improved terms with its product vendors as well as pass along additional costs by way of price increases without negative impacts to the business. Cost increases from wage inflation and from increased freight costs remain a concern, but the Group has been able to navigate these through a combination of re pricing and changing its air/sea freight mix and product sourcing locations. The Directors believe that the Group will be able to manage these risks via similar strategies going forward.
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
∙Liquidity risk – The availability of cash and liquidity could have a material effect on operational and financial conditions of the business. The management team has been able to successfully improve the cash generation of the business, paying back bridging financing taken on during the pandemic, ending the period with positive cash and no debt. The risk to the Group from liquidity concerns is considered to be manageable.
∙Foreign currency risk – The Group's presentational currency is sterling. It has subsidiary operations outside of the UK and the Group buys goods denominated in currencies other than sterling. The value of non sterling revenues, purchases, financial assets and liabilities and cash flows can be affected by movements in exchange rates in general and the US Dollar in particular.
Section 172 Companies Act 2006
The report sets out how the directors comply with the requirement of Section 172 Companies Act 2006 and how these requirements have impacted the Board’s decision making throughout the period. The Board ensures that decisions are always taken for the long term, and collectively and individually aims to uphold the highest standards of conduct. Similarly, it acknowledges that the Group’s employees and customers are their most important asset, and the business can only grow and prosper over the long term if it understands, respects and responds to their views and needs as well as those of other stakeholders with the environment we operate. The Board has identified the following stakeholder groups with whom engagement is fundamental to the Group’s ongoing success: Board and Senior Management Team: The Group operates with regular board and Senior Management meetings in place to ensure these groups are updated and communicated to regularly on business performance. Monthly board packs are prepared for the board to enable review of key performance metrics of the business and to receive any movements or significant changes to the business. Employees: The Group recognises that the employees are at the heart of all operations and the success of the business is dependent on attracting, training and motivating them. The Directors work closely with their managers in the day to day running of the business and the Group routinely engages with its staff as appropriate and where relevant. The Group continues to invest in training programmes, career development opportunities and actively encourages employees where appropriate to take part. The Group gives full consideration to
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
applications from people with disabilities where the requirements of the job can be properly fulfilled and supports them, as necessary.
Relationships with Customers: The Directors delegate the day to day responsibility for the Company’s business relationships with customers and other stakeholders to the executive management team. The business engages with its customers in various ways including labelling, social media, customer and consumer feedback. Relationships with Suppliers: The Directors delegate the day to day responsibility for the Company’s business relationships with suppliers and other stakeholders to the executive management team. All the Group’s suppliers are asked to commit to the Monsoon Accessorize Code of Conduct, which is based on the Ethical Trading Initiative (ETI) Base Code. This sets out minimum standards relating to working conditions, pay and employment rights. The Group works with suppliers to achieve improvements where necessary through corrective action plans. This includes monitoring sub contractors. Progress is monitored through regular visits and audits, carried out by in house specialists and independent external auditors. This includes unannounced visits to ensure the Group has an accurate picture of progress. As a founder member of the Ethical Trading Initiative (www.ethicaltrade.org), the Group benefits from shared learning and interaction with other members, including companies, non governmental organisations (NGOs) and trade unions. The ETI's ultimate goal is to ensure that the working conditions of those producing for the UK market meet or exceed international labour standards. The Group was a leading member of ETI Homeworkers Group and has made significant progress in rolling out the ETI piece rate methodology across its supply chain. Further information on the Group’s work on Ethical Trade is available at: https://www.monsoon.co .uk/sustainability -pledge.html
The Group continues to seek to reduce the carbon footprint through selecting sustainable fabrics and production methods for its products, effective direct energy management, working with suppliers to ensure environmental impacts are managed in a responsible way, and by minimising waste and packaging.
Examples of activities include:
∙Product working with suppliers to move to new materials that have less negative impact on the environment (illustrative examples include a broader use of organic cottons; adoption of sustainable synthetic materials such as LenzingTM EcoveroTM Viscose; development of sustainable vegan bags as an alternative to leather);
∙Planet working with suppliers to lower our carbon footprint through more energy efficient power and materials use (illustrative examples include integrating environmental criteria into shop design and refit programmes; ensuring all power to stores and other facilities is from renewable sources where under our control; working with logistics providers to move to lower-carbon transportation methods; removal of plastic bags from stores and reduction of inbound plastic packaging from suppliers, and adoption of paper-based products from sustainably managed forests);
We are continuing to review our goals and targets as we seek to become an ever more responsible and conscious business.
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ADENA BRANDS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
During the financial period the Group collected £76,000 (2023: £77,000) through single use plastic bag levy. The Group distributed the levy collected in England, Scotland & Wales to the Monsoon Accessorize Trust. The levy collected in Northern Ireland was paid to Department of Agriculture, Environment and Rural Affairs.
The Group made £128,000 (2023: £100,000) in charitable donations during the period. Donations made were in support of providing education and healthcare to those in developing countries through WaterHarvest and breast cancer support through Future Dreams.
Since 1994, the Monsoon Accessorize Trust has been supporting projects that impact the most disadvantaged and vulnerable women and children in communities across Asia. It is our mission to help provide education, healthcare, and employment initiatives which directly benefit vulnerable communities.
The Trust’s primary goals remain:
1.Educational programmes to alleviate the cycle of poverty.
2. Empowering woman and providing them with income generation opportunities 3. Supporting health initiatives through sustainable change.
The Trustees continued to focus on providing crisis and emergency support, while still supporting our existing partnership projects.
The Monsoon Accessorize Trust, a registered charity, reg no. 1038446, prepares separate financial statements. The Group strives to maintain a reputation for the highest standards of business conduct.
This report was approved by the board on 13 May 2025 and signed on its behalf.
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ADENA BRANDS LIMITED
DIRECTORS' REPORT
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
The Directors present their report and the financial statements for the period ended 31 August 2024.
The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 Group'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 Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the 53-week period ended 31 August 2024, after taxation, amounted to £6,256,000 (2023 - profit for the 52-week period ended 26 August 2023 £11,669,000).
The Company paid a dividend of £2,000,000 to its parent entity during the 53-week period ended 31 August 2024.
The Directors who served during the 53-week period ended 31 August 2024 were:
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ADENA BRANDS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
The Group does not follow any specific code or standard on payment practice but agrees payment terms during contractual negotiations with all prospective suppliers. Payment terms are clearly stated on purchase orders. It is the Group’s policy to abide by the agreed terms of payment where appropriate.
The Group informs employees of the development of the business through regular town hall meetings.
The Group seeks to work with each individual employee, enabling them to reach and maximise their potential in the context of their own personal circumstances.
The Group monitors its electricity usage and is seeking ways to reduce its carbon footprint.
The Group’s Streamlined Energy and Carbon Reporting statement has been prepared in line with the requirements of Streamlined Energy and Carbon Reporting regulations and the relevant areas of greenhouse gas (‘GHG’) Protocol Corporate Accounting and Reporting Standard. A ‘Dual Reporting’ methodology has been used to indicate emissions using UK electricity grid average emission factors (known as the ‘Location Based’ method), and also emissions using supplier specific generation emission factors (the ‘Market Based’ method).
The location based carbon intensity ratio, using the Group's UK only sales revenue of £175.7 million, is 6.851 Tonnes of CO2e/£m.
The Market based carbon intensity ratio, using the Group's UK only sales revenue of £175.7 million, is 2.344 Tonnes of CO2e/£m. During the period, the Group's strategy has been to purchase renewable energy backed by Renewable Electricity of Origin (REGO) certificates. Through this strategy, within the above 2023/2024 total energy consumption, the Group has sourced a total of 4,208,605.86 kWh of REGO backed (zero emission) electricity equating to 82.68% of total electricity use.
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ADENA BRANDS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
Energy consumption and associated carbon emissions have decreased compared to the previous year, driven by the following factors:
∙Reduced energy usage at the company’s distribution centre due to decreased usage of heating and air conditioning.
∙The closure of some larger format retail stores, replaced with smaller stores with lower energy consumption.
∙Lower staff road mileage, resulting in reduced travel-related emissions.
Additionally, to enhance energy efficiency, all newly opened or refurbished stores during the period were equipped with LED lighting as part of updated specifications.
See note 28 for further details on post balance sheet events since the 53-week the period ended 31 August 2024.
Under section 487(2) of the Companies Act 2006, Duncan & Toplis Audit Limited will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on 13 May 2025 and signed on its behalf.
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ADENA BRANDS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ADENA BRANDS LIMITED
We have audited the financial statements of Adena Brands Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 August 2024, which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 Group 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 Group's or the parent 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.
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ADENA BRANDS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ADENA BRANDS LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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ADENA BRANDS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ADENA BRANDS 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 Group 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:
We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit. The potential impact of different laws and regulations varies considerably. Firstly, the company is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws and regulations as part of our financial statements audit. This included the identification and testing of unusual material journal entries and challenging management on key areas of uncertainty being the estimates, assumptions and judgements made in the preparation of the financial statements. These key areas of uncertainty are disclosed in the accounting policies. Secondly, the group and parent company are subject to other laws and regulations where the consequence for non-compliance could have a material effect on the amounts or disclosures in the financial statements. We identified the following areas as those most likely to have such an effect: Health and Safety regulations, Employment law and Environmental regulations. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statements items. Our work included a review of the external audits conducted within the year for any evidence of non-compliance, reading minutes of meetings of those charged with governance and correspondence held with regulators, in addition to an assessment of any legal expenses and possible contingencies. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statement items.
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.
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ADENA BRANDS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ADENA BRANDS LIMITED (CONTINUED)
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
Enterprise Way
Pinchbeck
Spalding
Lincolnshire
PE11 3YR
15 May 2025
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ADENA BRANDS LIMITED
CONSOLIDATED INCOME STATEMENT
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
REGISTERED NUMBER: 12545293
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 13 May 2025.
The notes on pages 24 to 47 form part of these financial statements.
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ADENA BRANDS LIMITED
REGISTERED NUMBER: 12545293
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 13 May 2025.
The notes on pages 24 to 47 form part of these financial statements.
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ADENA BRANDS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 52-WEEK PERIOD ENDED 26 AUGUST 2023
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ADENA BRANDS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE 52-WEEK PERIOD ENDED 26 AUGUST 2023
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ADENA BRANDS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
Adena Brands Limited is a Company incorporated in England and Wales under the Companies Act. It is a Company limited by shares. The address of the registered office is given on the Company information page and the nature of the Company’s operations and principal activities are given in the Directors’ Report.
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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Income Statement in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Income Statement from the date on which control is obtained. They are deconsolidated from the date control ceases. In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations.
The directors have carried out a detailed and comprehensive review of the business, its future projects and its ability to meet its obligations as they fall due. In the opinion of the directors, the Group is expected to be able to continue trading within the current arrangements and consequently the financial statements have been prepared on a going concern basis.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Goodwill
Other intangible assets
At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
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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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Provisons are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligations, taking into account relevant risks and uncertainties.
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Statement of Financial Position when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
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 instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
2.Accounting policies (continued)
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.
Determine whether leases entered into by the Group either as a lessor or a lessee are operating leases or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis. Determine whether there are indicators of impairment of the Group's tangible and intangible assets, including goodwill. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash generating unit, the viability and expected future performance of that unit. Other key sources of estimation uncertainty: Tangible fixed assets Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Stock provisioning Stock is carried in the balance sheet at the lower of cost and net realisable value, after making due allowance for obsolete and slow-moving stock. The Directors have used their knowledge and experience of the industry to determine the level of provisioning required based on the ageing profile of stock. Dilapidations provisions A provision for costs, which will be incurred in returning a leased property to the condition that it was in at the inception of the lease, is made based on estimates provided by external surveyors. The actual costs of the work that needs to be completed could vary from the estimates.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
3.Judgments in applying accounting policies (continued)
Estimates may be required in determining the level of deferred tax assets and liabilities, which the Directors believe are reasonable. Various factors may have favourable or adverse effects on the deferred tax assets and liabilities. These include changes in tax legislation, tax rates and allowances, future levels of spending, the Group's level of future earning and estimated future taxable profits. Goodwill amortisation Judgment was applied by the Directors in determining the useful life of Goodwill. Goodwill is considered to have a finite life of 10 years and is amortised on a straight-line basis over its life.
Analysis of turnover by country of destination:
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
11.Taxation (continued)
There were no factors that may affect future tax charges.
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
13.Intangible assets (continued)
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
20.Deferred taxation (continued)
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
Share premium account
Foreign exchange reserve
Retained earnings
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
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ADENA BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 53-WEEK PERIOD ENDED 31 AUGUST 2024
a result, bad debt provisions have been recognised in relation to all amounts due from Adena Stores Germany Gmbh, which are reflected in the relevant subsidiaries' financial statements. Furthermore, the tangible fixed assets in Adena Store Germany Gmbh have been impaired to £nil. The overall impairment recognised totals £518,000.
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