John Smedley Slides to £720,000 Loss as Yen Hits Japan Sales

John Smedley fell to a £720,000 pre-tax loss in the year to 31 March 2025, reversing a £270,000 profit the previous year, as a weak yen crushed sales in Japan — the market responsible for half of the British knitmaker's international trade.

Sales fell 5% to £16.8m, according to accounts filed at Companies House. Managing director Jess McGuire-Dudley, 41, who took the top job last year after a decade at the company, is blunt about the situation. "The market is still extremely tricky," she says. "This year we are in the midst of a turnaround. The last several months have been profitable."

The caveat follows the promise. "There is a sense it is all coming through but it is a slow burn as we are having to recoup massive volume losses from Japan," she says. "We can't run a business on hope. We have had to pivot."

Where does the company actually make its money?

At its Lea Bridge site near Matlock in the Peak District — the oldest continuously operating factory in the world, with one building dating to 1784 — a 230-strong team produces 4,500 garments a week. Output runs under the John Smedley name and under contract for high-end brands including Lanvin, Margaret Howell and Daks. A smaller factory in Armthorpe, South Yorkshire, finishes the garments.

The company knits, dyes its own cotton yarn, then washes, steams and packs the finished product, using water from a brook running beneath the factory. Japanese knitting machines sit alongside artisans such as Tina, who has cut necklines by hand with chalk, a semi-circular guide and scissors for 38 years. Some machines are more than 60 years old and survive on bespoke parts.

In 2024 the company invested more than £4m in new machinery to raise efficiency and widen its style range. Takeaway: the turnaround is being financed out of operating cash, not outside capital.

What is driving the recovery attempt?

Three moves stand out. The actor Bill Nighy, who has worn the brand's three-button polo shirt since he was 17, collaborated on two collections. A cheaper diffusion line, JS, was sold in John Lewis in 2024 and now sells through the Smedley website and in Japan. And the company has pushed into Europe, launching a dedicated French website and opening a Milan showroom where it is testing pop-up sales events.

The combination, plus a new website, delivered the first year of UK sales growth in more than five years in the 12 months to the end of March 2026. McGuire-Dudley's verdict: "We are starting to prove those ideas are working. The new financial year will be transformational I think."

Why does a 240-year-old factory still exist in Derbyshire?

Most UK fashion manufacturing shut down more than 30 years ago as brands moved production to China, India and Bangladesh. The UK now has 3,515 clothing manufacturers, 315 fewer than a decade before, according to Office for National Statistics figures collated by UKFT. Industry employment stands at 15,000, down from 173,000 thirty years ago — a drop of more than 90%.

Smedley survives as a family concern. Roughly 65 descendants of the founding family own the business, chaired by eighth-generation heir Ian Maclean. The first John Smedley managed the original factory for Florence Nightingale's family in 1818; the Smedleys took control, registered the brand in 1876 and by the 1950s and 60s counted Marilyn Monroe, the Beatles and Audrey Hepburn among wearers.

The family has rejected buyout offers. "When my father was chairman we had a couple of approaches," says board director Robert Marsden-Smedley. "That was tempting and we felt they were trying to buy it with a view to asset stripping and what was left would not be us."

What are the risks ahead?

Cost pressure is real. Higher employers' national insurance contributions and minimum wage rises added £700,000 to Smedley's bills last year. "From a manufacturing point of view it was slightly shortsighted. Many manufacturers smaller than us went under," says McGuire-Dudley. "Energy and labour costs can wipe out profitability straight away and you don't have any control over them."

Skills are the second clock ticking. McGuire-Dudley says the factory is racing to train younger workers as its most skilled employees near retirement, with apprenticeships taking up to two years. To retain staff, the company has refurbished on-site housing for cheap rent and added pilates classes and a running club.

Marsden-Smedley frames the stake in generational terms: "It's a responsibility. I feel part of our job is being custodians of the business today to pass it on to the next generation in as good a state or a bit better." Whether the pivot to Europe and celebrity-led collections outruns the cost base and the retirement wave is the question the next set of accounts will answer.