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ANNUAL REPORT & ACCOUNTS
FOR THE 52 WEEK PERIOD ENDED 3 APRIL 2022
SERAPHINE GROUP PLC ANNUAL REPORT & ACCOUNTS FOR THE 52 WEEK PERIOD ENDED 3 APRIL 2022
265 Tottenham Court Rd, London W1T 7RQ
seraphinegroupplc.com
Highlights
04
About Seraphine
05 About us
07 Seraphine at a glance
08 Annual Highlights
10 Revenue Performance
12
Strategic Report
14 Chair’s Statement
18 Chief Executive Officer’s Statement
24 Chief Financial Officer’s Statement
32 Business Model
33 Strategy
34 Key Performance Indicators
35 Market Overview
38
Managing a Responsible Business
40 Sustainability Statement
41 Introduction
43 Sustainability Approach
44 Product
60 People
64 Planet
70 Stakeholder Engagement & Section 172 Information
74 Principle Risks and Uncertainties
78
Our Governance
80 Chair’s Introduction to Governance
82 Corporate Governance Statement
84 Board & Committees
88 Corporate Governance Framework
91 Summary of Key Board Activities and Work Undertaken
During the Year
94 Nomination Committee Report
95 Audit Committee Report
100 Remuneration Report
119 Directors’ Report
123 Viability and Going Concern Statement
125 Statement of Directors’ Responsibilities in Respect
of the Financial Statements
126
Our Results
128 Independent Auditors’ Report to the Members of Seraphine Group plc
138 Consolidated Statement of Total Comprehensive Income
139 Consolidated Statement of Financial Position
140 Consolidated Statement of Changes in Equity
141 Consolidated Statement of Cash Flows
142 Notes to the Consolidated Financial Statements
169 Consolidated Statement of Total Comprehensive Income
174 Consolidated Statement of Financial Position
175 Consolidated Statement of Financial Position:
Explanation of reconciling items between FRS 102 andIFRS
177 Company Statement of Financial Position
178 Company Statement of Changes in Equity
179 Notes to the Company Financial Statements
182 Company Information and Advisors
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Contents
Seraphine has a simple purpose:
to be with mums for the journey.
Our products support women in
their changing bodies, not only
with style and choice, but with
innovative technical aspects
that help ease the journey
of motherhood.
The group prides itself on its
in-house design and production,
whereby the group has full
ownership of product creation.
This allows the group to ensure that
the brand remains relevant and
high quality output is maintained.
The brand’s product range is
underpinned by a core ‘continuity’
offering of timeless, staple pieces
and supported by two seasonal
lines covering spring/summer
and autumn/winter.
About us
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
SERAPHINE GROUP PLC
ANNUAL REPORT & ACCOUNTS FOR THE 52 WEEK PERIOD ENDED 3 APRIL 2022
04
With mums
for the journey
Pregnancy brings all kinds of surprises; there are
decisions to make, piles of information to absorb
and changing bodies to contend with.
At Seraphine, we help women through it all.
Founded in 2002, we’re led by CEO David Williams,
CFO Lee Williams and Creative and Brand Director,
Chelsey Oliver – a mother of four who’s been designing
maternity and nursing clothes for over 15 years.
Seriously clever clothing
We’re proud of our technical expertise. Our clothes
aren’t just stylish, they’re seriously clever too.
Our in-house product team love innovating and
every time we find a new solution for a motherhood
challenge, it’s a victory for us.
Style and comfort in equal measure
When you’re pregnant, comfort is everything, but
you don’t need to compromise on style. We want
women to look and feel great, so soft fabrics
and adjustable fits are at the foundation
of everything we do.
Sustainable and responsible fashion
We take sustainability and responsible fashion
seriously and put thought into what we make, always
designing with longevity in mind. We’re helping nurture
the next generation after all so we have to look
after the world they’ll inherit.
Mum-approved
We test on real mums and mums-to-be of all shapes,
sizes, and motherhood stages. We show our committment
to parents in other ways too, such as with our
leading parental leave policies and Corporate Social
Responsibility initiatives.
We’re mum-first,
through and through
Seraphine at a glance
Chelsey Oliver, the mum
behind the brand
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
+
25.5%
+
53.1%
+
36.5%
+
87.5%
+
33.0 %
Currency sales growth
Digital Platform
North America
European Union
Digital Partnerships
Total Group
£135.5
15.6m
3.0%
Average Basket Value
Visits
Conversion
Three new market specific websites
Canada, Switzerland, Netherlands
Eleven markets with dedicated websites
Australia, Canada, France, Germany, Italy, Netherlands, Spain,
Switzerland, Rest of Europe, United Kingdom, United States
Two new digital partnerships
Zalando and Next
Annual Highlights Annual Highlights
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Digital Partnership*
Financial Year 2022 £4.5m
Financial Year 2021 £2.4m
North America*
Financial Year 2022 £15.0m
Financial Year 2021 £9.8m
Retail Stores*
Financial Year 2022 £2.7m
Financial Year 2021 £1.2m
Rest of World*
Financial Year 2022 £1.8m
Financial Year 2021 £1.7m
United Kingdom
Financial Year 2022 £10.0m
Financial Year 2021 £8.9m
Own Digital Platform*
Financial Year 2022 £38.2m
Financial Year 2021 £30.5m
European Union*
Financial Year 2022 £18.7m
Financial Year 2021 £13.7m
Retail Stores
Digital Partnerships
Own Digital Platform
84%
22%
33%
41%
+12.4%
+25.5%
+36.5%+87.5%
+53.1%+125%
+5.9%
6% 4%
10%
Rest of World
United Kingdom
European Union
North America
Revenue Performance
By Channel
Revenue Performance
By Geography
* Constant currency * Constant currency
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Strategic
Report
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
In a challenging
year, we have
continued to
follow our
strategy
Chair’s Statement
Sharon Flood
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
The board is working very well with the Executive Leadership
Team of the business, fostering healthy challenge as well as
proactive sharing of experience, knowledge and insight to
help Seraphine achieve our strategic goals.
During the year we announced the appointment of Lee
Williams as CFO, from French Connection Group, where
he was CFO and Company Secretary, following John
Bailey’s decision to step down. Lee’s deep experience in our
sector, both at French Connection and ASOS, makes him
a strong commercial and strategic CFO and he is currently
very focused on making the necessary improvements to
our financial management capability to strengthen our
financial function going forward. Further details of this are
laid out in the CEO Review.
In June 2021 we were pleased to welcome two additional
non-executive directors to the board – Bill Ronald and Sarah
Highfield – who bring a wealth of experience and skills
including particular expertise in public company matters
and high growth businesses. Bill will focus on remuneration,
Sarah on audit and risk, to support and guide Seraphine
through life as a public company. They have already been
providing huge support to the executive team and to me.
Sustainability
Sustainability is at the heart of our business and we have
worked throughout the year to develop an approach that
aligns with our customers. A sustainable supply chain is
fundamental and we continue to invest in ensuring the
quality of our factories, understanding our full supply chain
and pursuing initiatives such as the Better Cotton Initiative,
improving our packaging and creating innovative product
that can be worn throughout pregnancy and nursing,
dramatically increasing the wears per garment. The thriving
second-hand marketplace for our product is testament to
these actions in a market that is historically characterised
as ‘disposable’. In addition we have undertaken a significant
exercise to understand our carbon footprint which will form
the basis for the development of our strategy to net zero.
This year we have established the framework of what will
become our new sustainability strategy. At the heart of
the new framework are three key pillars: Product, People
and Planet. Our strategy recognises the importance of
managing the risks and opportunities connected to these
pillars, in order to secure the long-term success of the
business. We look forward to developing the measurement,
management and disclosure of our ESG activities in line
with best practice and to sharing further details in due
course.
Conclusion
Seraphine has grown enormously since our foundation in
2002 and we are ready for the next stage of our journey,
underpinned by our clear strategic goals.
Having taken firm steps to strengthen the business and
make it fit for the future, I am satisfied that we are now
better positioned to focus on driving profitable growth.
I would like to finish by thanking everyone at Seraphine for
their expertise, professionalism and commitment.
Sharon Flood
Chairman
31 July 2022
The year under review – our first as a listed
company – has been challenging in many
ways. Throughout it all, however, Seraphine
has continued to follow its purpose to be
‘with mums for the journey’, providing
fashionable, affordable, sustainable and
innovative clothing and products for
expectant women and parents.
The world emerged from Covid straight into the challenges
presented by the tragic invasion of Ukraine, together with
a backdrop of unprecedented supply chain disruptions,
affecting both the production and movement of goods
globally.
Seraphine faced challenges in navigating the resulting
complexities which included supply chain delays and
additional costs, an increase in costs associated with
cross-border transactions, shifting patterns in consumer
demand and substantial inflation in customer acquisition
costs which impacted profitability. Unfortunately, we were
also impacted by unforeseen duty and returns costs as we
entered new markets and channels.
The agility of our business model and the deep relationships
we have built with third parties throughout our supply
chain have meant that we were able to adapt and take
steps to mitigate some of the impact, however I am
still disappointed with the final FY22 results which are
significantly below the guidance set out at IPO. In the
CEO review, David Williams sets out in detail the actions
management have taken to strengthen the business.
Despite these challenges, we delivered our highest ever
gross product numbers and we continued to see very
encouraging international growth. In this period we
launched new websites in Canada, Switzerland, and the
Netherlands as well as delivering continued high growth
from our successful US business.
Our innovative product range, international reach and
strong underlying economics put us in a robust position to
focus on returning the business to profitable growth. Most
importantly, our product continues to be highly sought
after and desired by our customers, which is the core of our
success.
The business now has greater clarity on the headwinds
it faces and has put plans in place to address these
challenges. The newly strengthened management team is
focused on executing its stated strategy of using in-house
design expertise to deliver an innovative range of products
to an expanding customer base, including in the key market
of North America.
On behalf of the board, I would like to sincerely thank all our
new shareholders for their support during this challenging
year. The actions taken by executive management to
strengthen the business, together with the investment in
our team since IPO means we start our new financial year
in a more resilient position to face the challenges ahead
and convert the continued growth in customer demand
for our products into profitable margin growth. We remain
committed to delivering a business that delivers strong
future returns for shareholders in a sustainable way.
Having reviewed the performance for the 52 weeks to
3April 2022 and the likely headwinds in the economy
for the year ahead, the board is recommending that a
final dividend should not be declared for this year. It is
very much hoped that the normal dividend commitment
canberestored as soon as possible.
Board and governance
We are committed to the highest standards of corporate
governance and to operating with a strong, experienced
and diverse board of directors.
I am very pleased with the interaction and discussions
which have taken place at board level.
Chair’s Statement Chair’s Statement
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Seraphine is
synonymous with
the creation of life
and we constantly
strive to leave a
better planet for
all our children
Chief Executive Officer’s Statement
David Williams
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SERAPHINE GROUP PLC
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
This is our maiden full year results
following our IPO on the London Stock
Exchange in July 2021. I would like to
begin by thanking all our shareholders
for their support during what has been a
challenging year for the business.
All commentary is for the 52 week period ending 3 April 2022
against the non-statutory comparatives of 52 weeks to 4 April
2021. Please refer to page 29 for further detail.
In our first year as a public company, we have been
materially impacted by external factors and have also
faced some internal challenges. The external factors are
well known: the global supply chain crisis which emerged
in summer 2021, the effect of increasing energy prices on
warehousing and distribution costs and, more recently,
the significant downturn in global consumer sentiment
have all created headwinds against the execution of our
growth plans. Nonetheless, I am proud that despite these
setbacks we have delivered significant sales growth in the
period, remained Adjusted EBITDA positive, and expanded
our own digital platform into three new markets – Canada,
Switzerland and the Netherlands – whilst onboarding with
two new partners, Zalando and Next.
Turning to the internal challenges. The failure to correctly
calculate sales tax and duty costs in relation to movement
of goods into and out of new markets, or to mitigate them
with appropriate registrations, resulted in an impact to
profitability.
In light of both the external factors and internal challenges
experienced we have taken significant management
actions to strengthen our business as follows:
l Our new CFO Lee Williams initiated a full review of the
group’s finance function. This led to the recruitment of
additional resources and identified areas of improvement
through enhancing the group’s internal information
systems and processes
l The company’s executive committee has been
strengthened with the appointment of Fran Pillar
as COO and Seb Tarleton as Trading Director.
l A strategic re-pricing has been implemented post
period end, protecting entry level product pricing while
increasing more premium items which have traditionally
delivered exceptional value.
Strategy
Seraphine has a simple purpose: to be with mums for
their journey. Our products support women in their
changing bodies, not only with style and choice, but with
innovative technical aspects that help ease the journey
of motherhood. Our in-house design team remains
as committed as ever to developing exciting product
innovations – and the whole team remains committed
to bringing these to more and more expectant and new
mothers, worldwide.
We will continue to invest in our customer proposition by:
l Enhancing the customer experience
l Continuing to innovate our product range
l Building our international reach particularly in the highly
successful North American markets
l Strengthening our supply chain and embedding
sustainability in everything we do.
Operating review
We have delivered product revenue growth of 33.0% on a
constant currency (CCY) basis (28.8% variable currency)
inthe period with strong growth in North America of
53.2% CCY. Growth across our European markets totalled
36.3% CCY and in the UK we delivered double digit growth
of11.7%.
EBITDA was impacted by a number of factors including
pressure on customer acquisition costs, increased costs of
freight and distribution and unexpected costs of entering
new markets – standing at £2.6m, (FY21: £6.2m) down
(58.6)% YoY.
Own digital platform
The core of our business, our own digital platform continues
to drive our growth delivering +25.2% CCY in the year.
Despite economic headwinds, we have seen key customer
KPIs improve YoY, with Traffic (+12.7%), Conversion
(+20bps) and Basket Size (+6.5%) all growing, reassuring
usas to the strength of our core customer proposition.
In the period we invested most significantly in North
America, primarily through our existing US site but
complemented by the launch of a new dedicated site for
Canada. Our US site is now the single largest contributor
toour sales.
Our European sites also performed well in the period,
with growth in our established markets and the launch of
Switzerland and the Netherlands. The UK, our home market
and the longest established, was particularly hard hit by the
economic downturn in the final quarter but still delivered
growth on the prior year.
Whilst digital growth overall fell short of our initial
expectations for the year, the performance delivered
reinforces our belief that our digital first approach
to serving our customers should remain our primary
strategyacross all markets.
Delivering this growth against the backdrop of huge
challenges did not come without mistakes or learnings
– notably the aforementioned issues around sales taxes
andduty rates in markets outside of the EU – but we end
the year with a better capability to execute than before.
With the launch of Canada, Switzerland and the
Netherlands in the period the number of markets served
by our own digital platform stands at 11 (United Kingdom,
Germany, France, Spain, Italy, Netherlands, Rest of Europe,
Switzerland, United States, Canada, Australia). Our
platform was designed to allow us to launch new markets
quickly and in a capital-efficient way – and is a key pillar of
our growth strategy. We intend to launch dedicated sites in
the Nordics before the end of the next financial year.
Digital partnerships
We believe in putting product where the customer shops
– knowing that our marketing cannot reach everyone. To
that end, we launched with Zalando in Germany, Austria,
Switzerland, Belgium and the Netherlands during the
year and with Next in the UK in February, helping our
digital partner business deliver £2.0m (+87.8% CCY) in
incremental product revenue. Whilst this product revenue
growth was above expectations, the profitability of Zalando
has been disappointing and we are currently reviewing
options by market. The profitability of Next has been in line
with management expectations and we see encouraging
opportunities to grow this business alongside continuing
toexplore other partnership opportunities.
Retail stores
We believe that having a small selection of flagship stores,
in strategic locations, adds value to the brand. However,
we continue to evaluate the performance of our portfolio
of seven physical retail stores on a store-by-store, market-
by-market basis. Our target remains to drive the portfolio
as a whole to break even and we will make investments,
or disposals, as appropriate to achieve this. The retail
environment remained challenging for the entire period and
well below management expectations of a return to FY19
levels, felt especially in our UK and US stores. Post period
end we closed our Madison Avenue store in New York but
retain both our Soho store and concession in Macy’s Herald
Square in the same city. We continue to operate our other
stores in the UK and France. Our two Macy’s concessions,
operating on a turnover rent model, have delivered on our
target of break even or better contribution.
Digital marketing
Digital marketing continues to be the primary channel
by which we reach our customers, by showing relevant
and inspiring content and products to women in the early
stages of pregnancy, or capturing demand for specific
product searches.
During the year, we experienced a number of headwinds
that impacted our return on investment. In the first half,
the well-publicised supply chain issues meant that our
product catalogue was fragmented for a number of weeks,
having a direct impact on the quality of our marketing
which is primarily product and needs driven. We saw this
recover strongly in line with our stock position early in H2,
however in the second half of this period we were impacted
by significant inflation in advertising costs, along with a
decline in broader consumer sentiment.
We operate a number of successful targeting strategies
and are working to reallocate investment across these
and to deploy spend into other channels, including more
traditional marketing, but it is likely that it will take some
time to fully mitigate the increases in cost.
The overall blended Customer Acquisition Cost (CAC) in the
period was £16 vs £13 in the prior year.
Chief Executive Officer’s Statement Chief Executive Officer’s Statement
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
People
Our people are our greatest strength and core to everything
we do. Our culture is inclusive, innovative and collaborative
– and it is a testament to this that in a challenging year
it was ultimately our own people that uncovered and
solved problems. It is also the reason why we can do so
much in house – including design, prototyping and creative
marketing. It provides us with agility and flexibility at the
very core of our business – and I am extremely proud of the
entire team.
We have made a significant investment in people during
the year, strengthening our team for the future. This began
with the appointment of our new CFO, Lee Williams, who
has made good progress in improving our Finance function,
reinforcing expertise in the areas of financial planning,
accounting, and reporting.
Looking to the wider executive committee, we have
appointed a COO, who will lead the transformation of our
business systems and in-house logistics and operations
capability, and a Trading Director who will define and
execute our multi-channel and multi-market trading
strategy.
Product update
In the period we launched our new athleisure range,
bringing our expertise in superior fit to another category.
We continued to innovate in our outerwear range,
launching multi-season coats with babywearing
functionality, thus further extending the longevity of
wear. Responding to a resurgence in customer demand
for occasion wear as lockdown measures eased, we grew
our occasion wear collection with a particular focus on
innovative nursing functionality. Across the range we
balanced the maximisation of our strong, core continuity
range with on-trend style and choice in our seasonal lines
–all with thecommon thread of delivering fantastic-looking
products that solve common motherhood issues.
We also continued to invest in the core Seraphine
proposition – products that look incredible whilst also
supporting women with technical innovations that ease
and enhance the journey of motherhood. We designed two
new products with innovations we believe to be unique in
the space – one of which, a Babygro with an easy-change
zip system, launched post period end and the other, which
will see us enter a new category, will be brought to market
later in FY23.
At the end of the period we conducted the first broad-
based pricing review since 2017, ensuring that whilst we
protect key entry level products and price points, we
maximise profitability on mid-market and higher-end
products where we have traditionally offered exceptional
value. We will continue to review pricing regularly.
Our competitive position within our markets
Seraphine differentiates itself from its competitors in three
key ways:
1. Product innovation
Every garment is designed to not only to help our customers
look and feel stylish, but with integrated technical
functionalities designed specifically for pregnant and
nursing women – all with a focus on long-term use (almost
all products can be worn both during pregnancy and post-
partum) and sustainability.
2. Affordable premium price point
We target the mid-market customer and above, balancing
a large and resilient customer base with a commitment to
strong gross margins
3. Digital first
Our business is primarily driven by our own digital platform,
giving us a cost base advantage over competitors and the
flexibility to launch new markets in a capital-efficient way.
The unique creative in-house force behind our digital
marketing translates well across markets and is key to our
market launch strategy.
Supply chain
Like many retailers, we have not been immune to global
supply chain disruption caused as a knock-on effect of
Covid-19. Beginning in July 2021 we were impacted by the
late arrival of product, which slowed momentum over the
summer, resulted in less customers being onboarded, and
impacted repeat custom in the early autumn. Once the
stock issues were identified, we acted quickly and were
able to restore the stock position back to planned levels
by the end of the August holidays. We have had no further
impacts since.
We have long-standing relationships with our suppliers built
up over more than 20 years, which have proved invaluable
in providing our design and production teams with the
necessary flexibility to minimise external impacts – both
during the pandemic, when we were able to quickly pivot
our product mix based on changing customer demand, and
more recently as we navigated supply chain disruption.
In addition, we have worked with our freight forwarding
partners to improve the management information we
receive and have strengthened our internal logistics
function and processes to minimise future risk.
We ended the year with a stock position much higher than
historic years as a result of conservative planning around
global supply chain challenges and lower than expected
demand during the final quarter of the financial year.
Subsequently we have taken the decision to reduce future
stock intakes whilst preserving newness and innovation. This
is achievable due to the high continuity product mix of the
business and the lasting appeal of seasonal stock.
ESG
As a business that is synonymous with the creation of
life, aspiring to leave a better planet for our children has
always been at the heart of what we do and is ingrained
in our culture. Every new product innovation considers
sustainability from the outset, whether it be materials,
packaging, or sourcing – and each year we also make
strides in reducing our impact on the environment across
our existing product range. This year initiatives included
reducing plastic in packaging, increasing the longevity of
our products, and improving visibility in our supply chain.
Further details on our ESG strategy and progress made are
set out later in our Annual Report.
Outlook
The current trading environment remains challenging and
in particular we continue to experience significant inflation
in marketing costs. Rather than being driven by our own
customer KPIs, this is primarily a result of inflation in the
cost of displaying advertising in our primary channels which
we believe to be influenced by the more challenging macro
environment and weaker broader consumer sentiment. As
a result, we are spending circa 33% more to maintain prior
year revenue levels, with blended CAC up circa 60% on prior
year at £25.4 partially offset by higher gross basket sizes.
Product revenue in the first quarter of FY23 was below last
year, however trading improved throughout the quarter,
with June sales in line with prior year.
Our customer KPIs remain resilient. Return rates have
increased marginally above budget but have been offset by
increased basket sizes. As a result, net baskets (the amount
customers keep) have improved in all markets YoY, and the
average net revenue per customer visit is only marginally
softer than the prior year, which is a testament to the
strength of our customer proposition.
The biggest challenge for the group today is the inflation
experienced in marketing costs, as our customer KPIs
demonstrate the success of our brand when we are able
to put our products in front of customers. Therefore,
management is focused on optimising our digital
marketing spend and redeploying budget to traditional
marketing channels and partnerships, but it is too early to
provide guidance on potential mitigations to CAC for the
remainder of the year.
We will take immediate advantage of any reduction in
CAC on a market-by-market basis but will not increase our
overall marketing budget for the year to compensate for
the current inflation. By doing so we will only drive growth
in the short term when we believe we can do so profitably.
We are therefore updating our guidance for FY23 to deliver
sales growth normality. The group expects to remain
profitable with improving margin throughout this range,
however it is too early in the year to be able to guide to a
specific EBITDA margin with confidence.
The board is confident on the group’s ability to maintain
sufficient liquidity throughout the year.
Management is focused on driving efficiencies and setting
a strong base for profitable growth once the challenging
external conditions subside. The recent reinforcement of
the management team and the resilience seen in customer
KPIs once exposed to the brand provides reassurance on the
underlying strength of our proposition. We remain confident
in the medium-term opportunities for the business.
David Williams
Chief Executive Officer
31 July 2022
Chief Executive Officer’s Statement Chief Executive Officer’s Statement
SERAPHINE GROUP PLC
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Chief Financial Officer’s Statement
Lee Williams
Despite this
year’s many
challenges, the
business delivered
strong revenue
performance
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Chief Financial Officer’s Statement Chief Financial Officer’s Statement
In the 52 weeks to 3 April 2022 the
business delivered strong product revenue
performance though somewhat short on the
previous full year expectations.
All commentary is for the 52 week period ending 3 April 2022
against the non-statutory comparatives of 52 weeks to 4 April
2021. Please refer to page 29 for further detail.
We delivered product revenue growth of 28.8% year-on-
year to £44.0m, (+33.0% at Constant Currency (CCY))
and an adjusted EBITDA of £2.6m. This fell below previously
guided expectations due to final audit adjustments.
We finished the year with £2.8m of cash, having drawn
down £3.0m of our £6.0m Revolving Credit Facility,
equating to net debt of £0.2m at 3 April 2022.
These results were delivered despite extensive industry-wide
supply chain disruptions experienced due to the Covid-19
pandemic. In addition to this, the start of the Russia-
Ukraine conflict in February quickly led to a noticeable
decline in customer sentiment across Europe.
At a statutory level we delivered a loss after taxation
for the group of £(33.9)m, with exceptional items of
£(29.9)m making up a large part of that loss. The
exceptional items are mainly the impairment of goodwill
and other intangibles of £(27.9)m, as well as the IPO
costsof £(3.5)m. These are offset by gain on lease
modification of £1.6m.
The other component of that loss is the finance costs
of£(4.1)m, covered in the the financial statements.
Product revenue
During the year total product revenue increased to £44.0m,
a +28.8% (+33.0% CCY) improvement on the prior year.
Own digital sales
Own digital product revenue grew to £37.0m (FY21:
£30.5m) an increase of 21.2% (25.2% CCY). All existing
sites delivered growth during the year with North America
being the strongest market growing 53.2% year-on-year.
Although Europe and the UK delivered double digit product
revenue growth over the course of the full year, consumer
sentiment was noticeably softer in Q4 following the Ukraine
invasion. Product revenue growth from existing markets
was bolstered by the addition of new websites in Canada
(+£1.2m), the Netherlands (+£0.3m) and Switzerland
(+£0.8m).
Digital partners
Our digital partners channel, which includes wholesale
customers, also saw strong growth with product revenue of
£4.4m across the 12 months (FY21: £2.4m) an increase of
83.2% (87.8% CCY). We launched two partners in the year:
Zalando in Germany, Switzerland, Austria, Belgium and the
Netherlands, adding around £1.5m to product revenue, and
Next in the UK.
Retail stores
Our retail stores in France, UK and US, following their
reopening, grew product revenue to £2.6m (FY21: £1.2m)
more than doubling product revenue over the period
compared with the previous year which was impacted
bythe pandemic lockdowns.
Product revenue by geography
North America
Following a strong performance in the first half, the North
American market has continued to trade well, delivering
£14.4m of product revenue across the whole year, an
improvement on the prior year of +47.3% (+53.2% CCR)
with the strong debut of the dedicated Canadian site
making a big impact in that geography, complemented
by the reopening of the two New York stores and the two
Macy’s concessions following lockdown.
Europe
The EU market growth of +29.9% (+36.3% CCY) to £17.8m
was driven by our own digital platforms, the launch of the
Swiss site and Zalando Partnership Programme across a
number of markets, together with the reopening of the two
Paris stores.
UK
UK product revenue growth of +11.7% to £10.0m was
achieved across the digital platform, the reopening of the
four UK stores and our digital partners. This growth was
driven by our own digital platforms but also retail stores.
As retail was open for all 12 months of the financial year,
compared to 7 months in the prior year, this channel was
up 154%, +£0.5m.
Rest of World
Growth in the Rest of World segment slowed down in the
second half, delivering £1.8m product revenue, growth of
+4.3% (+1.0% CCY) with the largest component of that
being the Australian market.
Gross margin
The company delivered product gross margin of £27.8m
(FY21: £22.5m), achieving a gross profit margin of 63.2%
(FY21: 65.9%). The gross profit dilution of 270 basis points
has mainly fallen within our own digital channel due to a
number of previously disclosed market challenges including:
l Increased inbound freight costs
l Higher level of promotional activity across the year,
withsignificant activity over thelate December and
earlyJanuary period.
Distribution and administrative expenses costs
Direct operational costs have increased ahead of product
revenue growth due to the store reopenings following the
Covid-19 lockdowns together with the ending of furlough.
Adjusted distribution costs for the period increased to
£10.0m (FY21: £6.6m), 18.3% (FY21: 14.7%) as a proportion
of product revenue. Much of the increase is being driven
by two elements: a significant increase in returns costs
with returns rates increasing towards pre-pandemic
rates as well as the changes to international shipments
bought about by increased cross-border costs. These have
significantly increased the number of despatches incurring
administration and paperwork costs. These are in addition
to the inflationary costs being driven by the pandemic
as well as the increase in energy costs partly due to the
Ukraine war. We also incurred unexpected costs in the year
totalling around £0.3m when launching in new markets.
This related to failing to charge Canadian product revenue
tax when initially trading in that market and making an
incorrect duty declaration when returning stock from
Switzerland. Both these issues have been addressed and
resolved and have a one-off impact in FY22.
Customer acquisition spend as part of our administrative
expenses increased to £7.6m (FY21: £5.2m), reflecting
continued investment in the company’s new and
existing own digital platforms. We have also experienced
inflationary increases with these costs with an additional
£1.4m of rate increases being incurred above and beyond
that which was product revenue driven.
Other central costs have increased to £6.0m (FY21:
£4.2m). This was £0.7m lower than expected due to delays
in recruiting for new roles. These roles relate to planned
growth in our operational abilities combined with reduced
rent concessions and government support as well as the
costs to support the company’s transition to a plc.
Adjusted EBITDA pre-IFRS 16
The adjusted EBITDA (pre-IFRS 16) of £2.6m (5.8%) is
considerably lower than the prior year at £6.2m (18.1%).
Lower than expected product revenue growth reduced
EBITDA from £6.2m to £5.8m.
The further fall in EBITDA was a result of:
l £1.4m of increased marketing costs in the form of digital
marketing rates
l 1.0m of increased supply chain costs in the form of duty
and cross-border paperwork
l 0.6m of margin dilution, driven by higher promotional
spend
l 0.3m of unexpected costs relating to new market
launches
l Offset by £0.6m of delayed spend on head office
overheads.
Interest
Net finance costs in the period were £4.1m. This is
predominantly driven by ownership restructuring following
the IPO, specifically the writing off of the prepayment of
£2.4m of facility fees, the repayment of shareholder loan
notes and HSBC term loans from IPO proceeds. Shareholder
interest costs up to the IPO were £1.3m.
Tax
For the current period, a tax rate of 19.3% has been
used, which is in line with HMRC guidelines. The tax has
been adjusted for non-deductible items, which includes
shareholder loan facility fees, shareholder interests and
exceptional items associated with the listing of Seraphine
Group plc.
Earnings per share
Basic loss per weighted average shares was 75.6p.
Basic loss per share at 3 April 2022 was 66.6p.
Adjusted Earnings (EBITDA pre-IFRS 16) per weighted
average share was 5.7p.
Adjusted Earnings (EBITDA pre-IFRS 16) per share at 3 April
2022 was 5.0p.
6.2
6.4
(6.0)
(0.8)
5.8
0.6
(1.4)
(1.0)
(1.1)
(0.3)
2.6
£,000
4
2
0
6
8
10
12
14
FY21
EBITDA
Volume
Costs
@ Plan
PLC
Costs
EBITDA
@ Plan
Other
Overhead
Savings
Marketing
Cost
Increase
Supply
Chain
Cost
Increase
Promotional
Spend
New Market
Launches
FY22
EBITDA
Seraphine EBITDA Bridge: FY21 Actual to FY22 Plan to FY22 Actual
n Increase n Decrease n Total
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SERAPHINE GROUP PLC
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Balance sheet
On 16 July 2021 we listed on the premium segment of the
London Stock Exchange. The listing raised £56.1m gross
proceeds.
Impairment of goodwill and other intangibles
At the year end the value of goodwill has been tested, and
largely due to a revised discount rate as well as a change
in cost assumptions, an impairment of the value of £27.9m
has been made. This isan exceptional adjustment and a
non-cash item.
The board is intending to carry out a capital restructure of
investments in the subsidiaries following the impairment of
goodwill and other intangibles. Shareholders will be asked
to support this process at the Annual General Meeting.
Inventory
Inventories increased from £7.5m at the end of FY21 to
£14.7m. This stock build reflects the strategic investment
in inventory to reduce the reliance on timely shipments,
building in a level of latency to minimise trading impacts
brought about by issues within the supply chain, including
further lockdowns and shipping delays. This stock build will
be utilised to drive performance in FY23 but with overall
inventory falling to a more normal level by the end of FY23.
The write-off of damaged stock arose due to products
being returned which our team have identified as being
no longer of the quality we expect. The team are now
empowered, subject to cost threshold, to decide whether
to undertake the work to correct the defect (perhaps a
missing component) or write the items off on a timely
and regular basis. Our product team will be notified of any
styles that suffer multiple issues to identify if the original
design of the product can be amended to address the issue.
Within trade and other receivables are trade debtors
covering our Digital Partners channel. This increased from
£0.5m to £1.0m, an increase of 100% driven by the product
revenue growth in the Digital Partners channel of 83.2%
year-on-year. Prepayments and other debtors at £0.7m
was flat on the year.
The increases in inventory brought with it an increase in
trade creditors to £6.9m (FY21: £3.1m), more than doubling
on the year, while other product revenue volume-driven
creditors, such as the returns provision and duty payable
due to bonded nature of our warehouse, also increased
year-on-year. This resulted in total trade and other payables
increased to £12.8m (FY21: £7.2m), offsetting some of the
working capital increase from inventory.
Cash and cash equivalents at the year end were £2.8m
while borrowings are £3.0m of the total £6.0m available,
net debt is therefore £0.2m.
Cash flow
The cash generated from operations for the period was
£1.9m, an improvement of £1.8m on the year.
Cash flow has been impacted by the working capital
impact of increasing the level of stock in the business
to offset any future delays to inbound stock and the
subsequent increase in stock holding.
Seraphine’s outflow within investing activities up to 3 April
2022 was £0.8m across tangible and intangible assets.
£1.2m was in relation to the previously disclosed earnout
payment to the previous owners of the group, Bridgepoint
Growth, Cecile Reinaud and management.
Seraphine’s net cash generated in financing activities up
to 3 April 2022 was £2.8m, representing net cash flow from
IPO proceeds after loan notes and bank debt repayments.
The impact of the additional time needed to deliver
product to the distribution centre has had a negative
impact on the company’s free cash flow.
The free cash flow for the period represented -5.7% of
adjusted EBITDA (pre-IFRS 16). The management team will
continue to prioritise and proactively manage our inbound
stock position whilst supply chain issues remain and we
therefore expect second half free cash flow to improve
overfirst half but still be lower than historical levels.
Auditor’s appointment
PricewaterhouseCoopers LLP was appointed as
independent auditor to the company and in accordance
with section 485 of the Companies Act 2006, a resolution
proposing their reappointment will be put to the next
Annual General Meeting.
Lee Williams
Chief Financial Officer
31 July 2022
Chief Financial Officer’s Statement Chief Financial Officer’s Statement
Alternative Performance Measures
Presented below is the unaudited proforma consolidated statement of total income. The comparative information in this
is different to the statutory version presented in the financial statements. To allow year on year comparison of our results a
52 weeks period is presented in the proforma, however the statutory comparative period is 15 weeks ended on 4 April 2021.
The comparative period includes the period to 22 December 2021, prior to the acquisition of the group adjusted to include
the impact of IFRS 16. The 15 weeks to 4 April 2021 includes the post-acquisition accounting including the recognition of
goodwill and intangibles and the associated amortisation. References to revenue and sales in the CEO and CFO statement
relate to the revenue from sales before income from other services as described in note 10 on page 151.
52 weeks
to 3 April
2022
£m
52 weeks
to 4 April
2021
£m
15 weeks
ended 4 April
2021
£m
Product Revenue 44.0 34.2 8.7
Service Revenue 2.0 1.6 0.5
Total Revenue 46.0 35.7 9.2
Product Cost of Sales (16.2) (11.7) (3.0)
Service Cost of Sales (5.2) (4.0) (1.5)
Total Cost of Sales (21.4) (15.7) (4.4)
Product Gross Profit 27.8 22.5 5.7
Service Gross Profit (3.2) (2.1) (1.0)
Total Gross Profit 24.6 20.4 4.7
Distribution costs (4.9) (2.6) (0.2)
Administrative expenses (21.8) (14.5) (4.8)
Adjusted operating profit (2.0) 3.3 (0.2)
Exceptional Items (29.9) (5.4) (4.7)
Operating (loss)/profit (31.9) (2.1) (4.9)
Finance costs (4.1) (1.7) (1.4)
Profit/loss) before taxation (36.0) (3.8) (6.4)
Taxation 2.1 (0.5) 0.0
Profit/(loss) for the period (33.9) (4.3) (6.3)
Other comprehensive income   
Exchange gains arising on translation (0.0) 0.0 0.0
Total comprehensive income / (loss) (33.9) (4.2) (6.3)
References to revenue and sales in the CEO and CFO statement relate to the total revenue before income from other
services.
Proforma Consolidated Statement of Total Comprehensive Income
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Chief Financial Officer’s StatementChief Financial Officer’s Statement
Reconciliation of operating profit to Adjusted EBITDA pre-IFRS 16

52 weeks to
3 April 2022
£m
52 weeks to
4 April 2021
£m
Operating (loss)/profit (31.9) (2.1)
Exceptional Items 29.9 5.4
Depreciation and amortisation 0.5 0.4
Amortisation of brand value 4.1 2.1
Right of use amortisation 1.0 0.9
Right of use impairment 0.0 0.2
Private Equity fees 0.0 0.1
IFRS 16 Adjustment (1.0) (0.8)
Adjusted EBITDA pre-IFRS 2.6 6.2
Number of shares 50,902,011 
Weighted average number of shares 44,871,216 
Adjusted EPS (pence) 5.0 
Adjusted Earnings per weighted average share (pence) 5.7 
  
Adjusted EBIT  
Operating (loss)/profit (31.9) (2.1)
Exceptional Items 29.9 5.4
Amortisation of brand value 4.1 2.1
Private Equity fees 0.0 0.1
Right of use impairment 0.0 0.2
2.2 5.6
  
Adjusted PAT  
Adjusted EBIT 2.2 5.6
Recurring finance costs (0.3) (0.2)
Adjusted PBT 1.9 5.4
Tax at 19.3% (0.4) (1.0)
Adjusted PAT 1.5 4.4
Alternative Performance Measures Definitions
Performance measure Definition How we use the measure
Product revenue Product revenue of goods through our own
digital platform, digital partnerships and stores
reported net of discounts, value added taxes and
returns
A measure of the group’s trading performance focusing on the
sale of products to end customers. It is used by management to
monitor overall performance across markets and channels
Adjusted Product
Gross Profit
Product revenue less product cost of Product
revenue
A measure of underlying core product profitability
Adjusted
Administration
expenses
Administration expenses excluding depreciation,
amortisation, impairment charges, private equity
fees and IFRS 16 adjustments
A measure of underlying operational administration costs of the
business
Adjusted
Distribution costs
Distribution costs including service Product
revenue cost of Product revenue
A measure of total distribution costs
Adjusted EBITDA
pre IFRS
Adjusted EBITDA is operating (loss)/profit adding
back exceptional items, depreciation and
amortisation adjusted to a pre IFRS 16 basis
A measure of the group’s underlying profitability for the period, as
well as a measure for management to monitor the performance
and profitability of the business each month
Adjusted EBIT Operating (loss)/profit adding back exceptional
items, brand amortisation and private equity fees
A measure of the group’s underlying profitability for the period, as
well as a measure for management to monitor the performance
and profitability of the business each month
Adjusted PAT (post
IFRS 16)
Adjusted EBIT less recurring finance costs and the
corporation tax charge for the period
Included as a measure within the adjusted earnings per share
calculation for the group
Adjusted EPS
(pence)
Adjusted EBITDA pre IFRS 16 per share
outstanding at the period-end
A measure of the group’s underlying return to shareholders
Adjusted weighted
EPS (pence)
Adjusted EBITDA pre IFRS 16 per weighted average
number of shares outstanding in the period
A measure of the group’s underlying return to shareholders
Net Debt Cash and cash equivalents less any borrowings
drawn down at the period-end
A measure of the group’s liquidity
Adjusted Free
Cash flow
Free cash flow is adjusted EBITDA (pre IFRS16)
adjusted for net change in working capital and
capital expenditure
A measure of underlying cash generated by the group excluding
cash flows relating to financing activities and excluding the
impact of non-underlying transactions
Free Cashflow
Conversion
Adjusted free cash flow divided by Adjusted
EBITDA pre-IFRS
Liquidity ratio monitored by management to track the group’s
ability to convert its operating profits into free cash flow (FCF)
Constant Currency
(CCY)
Current year metrics converted into reporting
currency using the prior year exchange rates
A measure of underlying performance excluding the impact of
foreign exchange fluctuations between periods
Visits (Website
Traffic)
Number of distinct session of engagement with
our websites
Used by management to track the magnitude of customer
engagement with our website
Orders Orders received in the period prior to any returns Used by management to calculate other key APMs and to assist in
estimating order fulfilment requirements
Conversion
Rate
Orders divided by Visits Used by management to track the performance of our website
and products in converting visits into Product revenue
Average basket
value
Gross Product revenue divided by orders Internal KPI used by the group to assess the customer value and
underlying profitability of orders
Average Customer
Acquisition Cost
Customer Acquisition Costs divided by Orders This is used by management to allocate marketing spend at the
order level to help calculate and optimise order profitability
Customer
Acquisition Costs
Total direct marketing spend for own digital
channel
Used by management to track efficiency of marketing spend to
drive traffic and convert to orders
Year-on-Year
(YoY)
52 weeks ended 3 April 2022 vs. the 52 weeks
ended 4 April 2021
Used to assess change over reporting periods in the majority of
these APMs
Exceptional items included in adjusting items
To calculate the alternative performance measures listed above adjustments have been made for exceptional items. These are significant
items of income or expense in Product revenue, profit from operations, net finance costs, taxation which individually or, if of a similar type,
inaggregate, are relevant to an understanding of the group’s underlying financial performance because of their size, nature or incidence.
l Project EROS costs of £3.5m reflect associated expenditure with the IPO process that took place from July 2021.
l Changes to two of the US store lease agreements resulted in a gain on early termination, as well as a gain on lease modification in the
period of £0.1m and £1.5m respectively.
l An impairment of £27.9m has arisen upon management’s assessment of impairment in relation to goodwill and intangible assets.
l Included within other exceptional items is design infringement costs, head office expenditure and redundancy costs.
SERAPHINE GROUP PLC
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Business Model Strategy
The group’s strategy is focused on growing both its own digital platform and digital partnerships:
Own digital
platform
Seraphine will expand its digital platform via continued growth in existing markets, where
it has significant potential for further growth in Western Europe and North America, and
the continuation of its capital efficient platform rollout strategy in new markets, such as
the Nordics. It will seek to further enhance its digital marketing capabilities, backed up
by investments in traditional brand building, to drive greater traffic to its websites and
penetration of global markets.
Digital
partnerships
At the same time Seraphine will seek to increase its customer reach by expanding its
business with existing digital distribution platform partners and seeking new partnerships
including other digital specialists and multi-channel retailers.
This consistent digital strategy is supported by the group’s sharp focus on maternity and
nursing products which marks Seraphine out as a leading specialist brand with superior
technical product expertise and powerful digital marketing scale and specialism.
Superior technical
product expertise
The group’s strong focus on maternity and nursing products has enabled it to become
a market leader in this sector. With over 19 years’ experience in designing maternity and
nursing wear exclusively, the Seraphine brand is synonymous with innovative and functional
products which has given Seraphine a strategic advantage over its competitors.
Leading specialist
brand
Seraphine's international reach through its digital approach brings global brand
recognition, with exports to over 100 countries in FY22. Seraphine is recognised globally
as a leading maternity and nursing wear brand and this brand status, underpinned by
celebrity and press endorsement, is an acknowledgment of Seraphine as a market leader
inits sector.
Powerful digital
marketing scale
and specialism
The group will continue to invest in its highly effective marketing strategy which drives
brand awareness and customer conversion.
The group’s marketing strategy is to target women at each lifestyle stage of pregnancy and
motherhood and takes an interlocked threefold approach:
Paid digital
Including paid search optimisation covering the likes of Google Shopping and AdWords and
paid social through global platforms such as Facebook and Instagram.
Organic digital
Which focuses on generating business over longer time frames through increasing brand
awareness. Methods include the creation of SEO-optimised website content, customer
database email send-outs and expanding the brand’s own social media following.
Traditional marketing & PR
Gaining coverage in web and print publications for dressing influencers, celebrities and
royals through traditional PR. Placing highly targeted advertising with other key partners in
the motherhood journey.
The group utilises an in-house advertising and content creation team, which allows greater
control over brand positioning and messaging and works with expert third party agencies
for the deployment of its digital marketing strategy.
Non-financial information statement
The company has complied with the Non-Financial Reporting Directive contained in sections 414CA and 414CB of the
Companies Act 2006.
Where to find related information
Environmental Page 43 Social Page 66 Principal risks Page 74 Business model Page 32
Employees Page 60 Human rights Page 122 Anti-corruption
and anti-bribery
Page 99 Non-financial key
performance indicators
Page 34
Market-leading
product and brand
Nineteen years’ experience designing
maternity and nursing wear,
with technical leadership over
competitors in terms of product
functionality and breadth,
underpinned by a clear
sustainability agenda
Global, digitally led
business model
>90% digital brand, with around
75% of sales coming from outside
of the UK with sizeable
opportunity to scale
Highly efficient
and profitable
marketing strategy
Optimised, scalable customer
acquisition programme,
delivering replicable first-order
profitability across regions
and channels
Attractive
market dynamics and
competitive positioning
Highly resilient and under-competed
market, where Seraphine is
the scale specialist
Robust growth profile,
and market-leading
financial KPIs
Rapid organic revenue growth,
class-leading gross margins and
EBITDA margins, and high
cash conversion
High performing and
cross-functional team
Expertise in scaling e-commerce
businesses and designing
innovative products
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Global maternity and nursing wear market
Seraphine operates in the global maternity and nursing
wear market.
A market overview report from Armstrong estimates that
the size of this market in Seraphine’s core geographies,
being North America, theUK and Western Europe, was
£2.4 billion in 2019 (the‘CoreTAM’), out of a global
£4.7 billion global market.
Within these markets, Seraphine specifically targets
customers in the premium, affordable luxury and mid-
market price segments (the ‘Core SAM’); Armstrong
estimates this market was worth £109 million in the UK
and£408 million in the US in 2019, against a Core TAM
of£190 million (57%) and £1.2 billion (35%), respectively.
In respect of its Core SAM in 2019, Seraphine had only a
7% share in the UK, 1% in the US, 3% in France and 2%
inGermany (Armstrong). This indicates that Seraphine has
successfully established a presence in these geographies,
but with substantial opportunity for future growth. This
material headroom for growth is complemented by
consistent growth within the online maternity and nursing
wear market where Seraphine is focused.
Between 2017 and 2019, this market grew at a CAGR of
6% in the UK and 18% in the US according to Armstrong
analysis.
This trend is expected to continue between 2019 and 2026
with healthy CAGRs of 8% and 11% projected, respectively,
in the UK and US, based upon Armstrong analysis.
The high degree of resilience, within the maternity and
nursing wear market, as compared with the broader
womenswear industry has proven out during economic
downturns, including during the Covid-19 pandemic,
reflecting the needs-based requirement of maternity wear
compared to the discretionary aspect of purchases in the
wider apparel market (Armstrong).
There are a number of important barriers to entry to the
maternity and nursing wear market, including:
l The level of technical expertise required in the design
process, which the group has accumulated over the
period of 19 years since Seraphine was founded
l The level of technical expertise required in the
manufacturing process, which limits the number of
suppliers and manufacturers and provides an advantage
to established players, who are able to achieve the
minimum order quantities necessary to maintain
competitive pricing
l Changing customer needs throughout the product
lifecycle, which make it more difficult for new entrants to
cater for each phase of the pregnancy and motherhood
journey, particularly when combined with high customer
acquisition costs and a shorter timeline from which to
derive value from this investment.
In this respect, the emphasis placed on meaningful
branding is key in order to reach prospective customers
at the earliest point in their pregnancy and motherhood
journey and encourage them to return to the brand for
subsequent pregnancies or postpartum.
Seraphine provides a distinct offering through its strong
digital platform, where almost 15 years of digital marketing
investment has enabled the brand to accumulate
know-how, experience and data to accurately target
its Core SAM; this level of differentiation would not be
straightforward for a competitor to replicate. In addition,
Seraphine maintains a sole and dedicated focus on
maternity and nursing wear, with limited deviation into
other product ranges, which gives it a technical advantage.
This is complemented by Seraphine’s commitment to
designing innovative, functional and fashionable maternity
and nursing wear at an affordable premium price point.
Seraphine combines this focus with continuous product
innovation, including its skin-to-skin offering, which
provides a competitive advantage against competitors
withnarrower or less specialist product ranges.
Geographic breakdown
Armstrong estimates that the maternity and nursing wear
market generated approximately £2.4 billion in revenue
across North America, the United Kingdom and Western
Europe in 2019. The group distributed products to over
100 countries in FY22 and the group’s current geographic
footprint, in terms of total group revenue, is 33% North
America, 23% UK and 41% Western Europe.
North America market
The North American (US and Canada) maternity and
nursing wear market was valued at an estimated £1.3
billion per annum in 2019 (Armstrong). In the US (which
comprises 90% of the North American market), the Core
SAM accounted for 35% of the market in 2019, of which it is
estimated that Seraphine holds only an estimated 1% share
(Armstrong). The online segment of the US maternity and
nursing wear market grew at a CAGR of 18% between 2017
and 2019, with CAGR of 11% anticipated between 2019 and
2026, based on Armstrong estimates.
We use these key performance indicators as measures
to track both the financial value we create for our
shareholders and the strategic value ingrowing our
business and delivering ourpurpose.
Key Performance Indicators Market Overview
Source: Armstrong market model, Armstrong analysis
Product gross profit margin
Financial Year 2022 63.8%
Financial Year 2021 65.9%
Product revenue
Financial Year 2022 £44.0m
Financial Year 2021 £34.2m
Product gross profit
Financial Year 2022 £ 27.8m
Financial Year 2021 £22.5m
Revenue growth
Financial Year 2022 £9.9m (28.8%)
Financial Year 2021 £6.1m (21.8%)
Adjusted EBIT pre-IFRS 16
Financial Year 2022 £2.5m
Financial Year 2021 £5.6m
Adjusted EBITDA pre-IFRS 16
Financial Year 2022 £2.6m
Financial Year 2021 £6.2m
Financial KPIs
Total active customers
Financial Year 2022 321,213
Financial Year 2021 270,687
Website traffic
Financial Year 2022 15,577,354
Financial Year 2021 13,818,962
Gross order value
Financial Year 2022 £63.6m
Financial Year 2021 £50m
Conversion rate
Financial Year 2022 3.0%
Financial Year 2021 2.8%
Average basket value
Financial Year 2022 £135.5
Financial Year 2021 £127.17
Customer acquisition cost
Financial Year 2022 £ 7.6 m
Financial Year 2021 £5.2m
Operational KPIs
1 Adjusted EBIT Operating (loss)/profit adding back exceptional items and brand value amortisation. IFRS 16 adjustment added back for pre-IFRS adjusted EBIT
2 Adjusted EBITDA Operating (loss)/profit adding back Exceptional items, depreciation and amortisation, private equity fees and share based payments. IFRS 16 adjustment added back
for pre-IFRS 16 adjusted EBITDA
3 Total active customers An active customer is defined as a customer who has purchased a business entity’s products at least once in a 12-month period
4 Gross order value The gross order value includes the sum of all transacted orders – any deductions by cancellations, returns, sales costs or discounts are not yet taken into
consideration.’
5 Average Basket Value The Average Basket Value of products sold in a single purchase. This is calculated by dividing the total value sales by the total number of order transactions.
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Market Overview Market Overview
United Kingdom market
The UK maternity and nursing wear market was valued at
an estimated £190 million in 2019, with Seraphine’s Core
SAM accounting for 57% of total spend (Armstrong). The
online segment of the UK maternity and nursing wear
market grew at a CAGR of 6% between 2017 and 2019,
with a projected CAGR of 8% from 2019 to 2026, based
on Armstrong estimates. This represents growth in online
penetration from 28% of the market in 2017 to up to 48%
projected in 2026, based on Armstrong estimates.
Western Europe market
The Western European maternity and nursery wear market
was valued at an estimated £850 million in 2019, with
France and Germany (valued at approximately £155 million
and £179 million, respectively) forming the most substantial
markets for the group (Armstrong).
The structure of these markets varies slightly; the Core
SAM accounts for 59% of both the French and German
maternity and nursing wear markets, based on Armstrong
estimates. However, the composition is more fragmented
in Germany with a higher number of participants and key
players serving multiple pan-European markets. In contrast,
the French maternity market is characterised by fewer,
fashion-forward specialist players with an established
presence and reputation, including brands such as Envie
deFraise. Germany has shown higher levels of growth in
recent years.
Rest of the World market
The Rest of the World (RoW) maternity and nursing wear
market had an estimated value of £1.6 billion in 2019
(Armstrong). There is substantial opportunity for growth in
these markets, where Seraphine’s Core SAM comprises an
increasing proportion of the overall maternity and nursing
wear market, due to a rising number of women in the
working population in emerging economies contributing to
a similar trend towards fashion-forward maternity wear.
Market trends
Shifting customer demographic and lifestyle demands
driving spend per birth
Changes in lifestyles and customer demographics are
key trends driving growth in the maternity and nursing
wear market, particularly within Seraphine’s Core SAM
(Armstrong). In particular, there has been an increase
in the average age of first-time mothers in developed
countries (in the UK, increasing from 27.7 years old in 2010
to 28.9 years old in 2019), which means that expectant
mothers have a higher level of disposal income to spend
on purpose-designed maternity and nursing wear (ONS;
Armstrong). These shifts in customer demographics are
complemented by substantive lifestyle changes, including a
much higher proportion of women in the workforce, a trend
towards women remaining active during their pregnancies,
and a greater desire to remain fashionable during
pregnancy. The stabilisation of fertility rates has therefore
been offset by an increasing number of women continuing
to work until much closer to their due date, increasing
demand for maternity workwear and extending the lifecycle
for products which carry a higher margin and fall within
Seraphine’s core product lines.
Ongoing consumer shift to e-commerce
The last decade has seen a significant shift in consumer
spending habits, most notably the rise of e-commerce and
increase in online consumer expenditure. Convenience as a
driving force for e-commerce carries even greater weight in
the maternity and nursing wear market, where the target
demographic often has less time, may prefer shopping
for such items with greater privacy, and may be less able
or less inclined to visit retail stores. This is reflected within
the composition of the market, with a rising proportion of
purchases in the UK and US maternity and nursing wear
market (42% and 31% in 2020, respectively) taking place
online (Armstrong).
This trend is set to continue; we estimate that, by 2025,
over 50% of the maternity and nursing wear market will
comprise of the Millennial and Generation Z demographic
who present a higher affinity for e-commerce, providing
confidence in the continued growth of the online maternity
market and reinforcing Seraphine’s competitive position
within this market. The rise in online consumer expenditure
will also inevitably have been influenced by the Covid-19
pandemic, where governmental restrictions and local
lockdowns have reduced reliance on traditional bricks-and-
mortar retail stores. Depending on their supply chain and
distribution networks, brands with a larger online presence
also typically carry fewer overheads and are therefore less
susceptible to global economic downturns.
Market resilience
Maternity and nursing wear is typically purchased as a
result of necessity, to accommodate the biological changes
which occur during pregnancy. As a result, this market
is characterised by higher levels of resilience throughout
periods of economic downturn, particularly when compared
to the general apparel markets which are often more
discretionary in nature. This was demonstrated during
the global financial crisis, where the UK maternity and
nursing wear market increased by 0.7% in 2009, while
the UK general apparel market fell by 1.9% in 2008 and
was static in 2009, based on Armstrong analysis. Further,
Seraphine has continued to grow despite the ongoing
Covid-19 pandemic (21.8% CAGR FY20-FY21), where it is
expected that Seraphine’s Core SAM will have experienced
less volatility than the value segment of the market. In this
respect, Seraphine benefits from a more affluent target
demographic than other market participants, given that
these customers are generally in more resilient financial
positions than other demographics (Armstrong; Company
information).
Competition
Seraphine competes with a wide range of both specialist
maternity and nursing wear retailers and non-specialist
general retailers, including those with a focus on baby,
childrenswear and baby hardware, across its Core TAM
and the RoW market. Within the luxury price segment, a
high proportion of Seraphine’s competition comes from
maternity pure-plays. Within the affordable premium and
mid-market price segment, the company faces competition
from global specialists and more generalist apparel and
womenswear retailers.
Seraphine has carved a space for itself on this platform
where it can compete effectively across both markets.
It achieves this through replicating the scale advantage
achieved by larger mass-market retailers (which is atypical
within the specialist maternity wear market), leveraging
its supplier relationships and economies of scale to price
competitively and generate higher margins. In comparison
to the generalist apparel players, the brand benefits from
its streamlined focus on maternity and nursing wear, and
targeted investment on design and innovation. In this
respect, Seraphine maintains its competitive position
through a combination of scale and technical advantage.
While Seraphine competes in a fragmented market,
the directors believe that there are many factors that
differentiate the group from its competition, including its
price point and price-to-quality ratio; the opportunity for
its digital proposition to expand its international reach; its
strong performance marketing capabilities; a concentrated
focus on designing and creating functional products in
the maternity and nursing wear market which support the
entire pregnancy and motherhood journey at an affordable
premium price point; the group’s continued development of
innovative products complementary to its existing offering
(for example, the launch of its post-partum shapewear
and babywearing products), which provides a competitive
advantage against competitors with narrower or less
specialist product ranges; and its emphasis on brand
awareness and reputation.
UK online market size and online penetration US online market size and online penetration
2026F2025F2024F2023F2022F2021F2020A2019A2018A2017A
28%
£52m
31%
42%
2017-2019
CAGR: 18%
2019-2026
CAGR: 11%
41%
42%
44%
45%
47%
48%
£59m
£76m
£77m £81m
£85m
£89m
£94m
£98m
29%
£55m
2026F2025F2024F2023F2022F2021F2020A2019A2018A2017A
15%
£171m
20%
31%
28%
28%
30%
33%
35%
37%
£236m
£291m
£311m
£342m
£376m
£414m
£456m
£502m
18%
£208m
2017-2019
CAGR: 18%
2019-2026
CAGR: 11%
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Managing a
Responsible
Business
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
GERBER
Pattern system
(eco efficient)
Sustainability Statement Introduction
We are at the start of
our sustainability journey
and are fully committed
to building a better
business to offer the best
products to our customers
throughout their
motherhood journey.
We recognise the importance and increasing consumer
focus on sustainability, as well as the wider impact of
the fashion industry on the environment. The company is
building a framework to create and maintain a positive
relationship with our employees, supply chain and the
environment. We want to share our story highlighting our
focus on longevity of product, with clothing designed to be
worn throughout pregnancy and the postpartum stage.
We are dedicating time and effort towards achieving
responsible sourcing targets and people initiatives. In
this way, we ensure that the care, attention, energy and
resources that go into our clothes are never wasted. Our
primary focus is to produce responsibly and our roadmap
toachieve our ‘Better Planet’ mission can be seenbelow.
Driven by three key pillars, we aim to use the power of the
group’s supplier relationships to ensure that the people
making our clothes thrive and that the products are made
in ways that leave the environment in a better state for the
next generation.
Product
Our design ethos is centred on creating high quality,
well-constructed functional clothes with a strong focus
on longevity and durability. We focus on the product’s
cumulative wear and lifespan to ensure it works through
every stage of the pregnancy journey.
People
At Seraphine people are at the core of what we do;
weaimto build a company with shared values that are
inclusive forall.
Planet
Protecting the planet is really important to us. Our teams
are committed to developing a sustainable business, with
a transparent supply chain that isfuture-proofed and
reduces ourwaste and carbon footprint.
Our roadmap to achiving our ‘Better Planet’ mission
Strong focus on longevity of products
Continuity of range, reducing unnecessary production
Committment to greener pacakging
Continuous improvement in supply chain and ESG performance
2014 2015 2016 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
The milestones shown present a subset of the a more detailed list of actions which the company has completed and plans to implement as part of
the on-going ESG strategy as outlined in the Prospectus
Longevity
principle
built into the
design strategy
Supplier audits
using SEDEX
platform
Supplier manual
issued
incorporating ETI
base code
ECO components
Organic denim
range launched
FSC paper
replaces all card
components
Launched 100%
recycled 100%
recyclable
polybags
Supply chain
transparency
100% Tier 1
supplier registered
Continuity range
70% of sales
Reporting on Task
Force on Climate-
related Financial
Disclosures in line
with guidelines
Scope 1, 2, & 3
emissions
reporting
Charity partner
programme
Sustainable
product policy
Regenerative
fibre sourcing
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
TIER
1
Garment Factory
Includes cutting, sewing,
construction, finishing and
inspection
TIER
2
Subcontractors to
Garment Factory
Includes trim/packaging/label
suppliers, laundries, print mills
and embroidery houses
TIER
3
Fabric and Yarn Suppliers
Includes spinners, weavers,
knitters, dye houses, print mills
TIER
4
Fibre Processors
Includes filament and staple
fibre suppliers
TIER
5
Raw Material Source
Includes all farming and
extraction sources
Introduction Sustainability Approach
Over the year, we have identified five key Environmental,
Social and Governance (ESG) priorities for the business:
1. Ensuring clear strategy and KPIs are in place for our
expanding team with all stakeholders signed up to the
journey
2. Committing to our net zero pledge and working towards
our goal: 2050
3. Continuing our focus on sustainable product and
longevity of design with increased use of planet-friendly
fabrics
4. Increasing company transparency of all sourcing with a
focus on Tier 1 suppliers utilising The Higg Index to support
this
5. Reducing the use of plastic throughout the business and
ensuring we have recyclable options where it is required
Governance
This year, we have re-established our ESG sub-committee.
With our new talent on board, we want to ensure that all
departments are aligned and aware of Seraphine’s direction
creating a fully integrated plan reflective of our core values.
Our mission is to accelerate progress utilising our new
combined industry knowledge and expertise. Having
afocused sub-committee in place enables us to scale
anddrive the business forward, measuring tangible
ESGresults along the way.
The executive committee are accountable for ensuring
objectives are met and reporting back to the board.
Governance structure
Tier structure from delivery (Tier 1) to production (Tier 5)
Product
Premium motherhood products
designed with timeless style
Design with a focus on longevity and
market-leading cumulative wears
Functionality and innovation to support
the motherhood journey
A focus on earth-friendly fibres,
being kinder to the
planet
People
Our people are at the
core of everything we do
Create a working culture with shared
values that are inclusive for all
Provide safe working environments for all
of our communities, without exception
Support our mums and parents through
a range of meaningful partnerships
and collaborations
Planet
A united goal to reduce our
impact on the environment
Set high environmental standards
throughout our operations value chain
Increase the transparency of our supply chain,
focusing on ethical practices and reducing
ourcarbon footprint
Reduce the use of plastic and increase our
use of recycled packaging materials
‘Better Planet’ framework
PRODUCT &
MERCHANDISING
ECOMMERCE
&MARKETING
WHOLESALE LOGISTICS
HR
ACCOUNTS LEGAL
BOARD
PRODUCT SUSTAINABILITY
SPECIALIST
BUSINESS COMPLIANCE
MANAGER
CHAIR 1
CHAIR 2
EXECUTIVE
COMMITTEE
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Designed by
Mums for
Mums
Our carefully curated collections
have been designed and developed
in-house for nearly 20 years.
Our expertise comes from a highly
skilled product development team,
many of whom have been through
themotherhood journey themselves.
They understand key pregnancy
milestones and how the body
changes, so fit and functionality is
always at the forefront of our designs.
For us, it’s about empowering mums
to feel good in what they’re wearing,
whatever stage they are at.
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Product Product
The strength of the Seraphine brand is derived from
Heritage
Launched in 2002 with the vision of creating clothing so
beautiful you would want to wear it even if you weren’t
pregnant, and remains true to that today
Unique design
Hundreds of products designed and prototyped in-house,
ensuring Seraphine has full ownership of product creation,
with 19 years of perfecting technical attributes, size and fit
Differentiated products
Seraphine outperforms competitors through its innovative
and versatile products which comprise a broad range of
fashionable, superior fit and quality maternity andnursing
wear at an attainable price point
Focus
Seraphine is synonymous with maternity and nursing
wear, the sole focus of the brand, echoed in its ability
tocontinually innovate in the space
Scale
Seraphine’s international reach through its digital
approach brings global brand recognition. With exports
to100 countries, Seraphine has a global reputation
as the go-to brand for mums to be, with a long list
of celebrity and royal fans
Seraphine is a leading
international maternity
retailer. The go-to brand
for mums-to-be.
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About Seraphine | Strategic Report | Managing a Responsible Business | Our Governance | Our Results
Product Product
1
2
3
4
The four pillars of
our design ethos
With mums
for the journey
Fashionably
pregnant
Stylish products designed
to meet the needs of
today’s pregnant and
nursing women
Luxury quality
Offering the quality of
premium designer
product at an
affordable
High functionality
Versatile, multifunctional
product ranges supporting
women at all stages
of motherhood,
across all
occasions
Aspirational yet
attainable
Seraphine is an affordable
luxury brand, appealing to
all lifestyles while also
dressing celebrities,
royals and influencers
A pure play maternity and nursing brand combining beautiful design,
expert fit and innovative functionality at an attainable price point.
Designed with key pregnancy milestones in mind, our collection is differentiated
by its breadth and depth of choice. We pride ourselves on developing functional,
stylish, premium-quality products across a variety of price points within each
category resulting in high engagement withmums across many affluence levels.
First trimester
Second trimester
Third trimester
Fourth trimester and beyond
BASICS
ACTIVEWEAR
NURSING BRAS
DRESSES DENIM WORKWEAR LINGERIE
OCCASIONWEAR BABYMOON BABY SHOWER HOSPITAL BAG
NEW DADS SHAPEWEAR NURSING TOPS BABYWEARING GIFTING SKINTOSKIN
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Product Product