Gear4Music Founder Andrew Wass Becomes Executive Chairman Amid Leadership Reshuffle

Gear4Music, the York-based online musical instruments retailer, has announced a significant leadership reshuffle as the company reported £144.4 million in sales for the financial year ended March 31, 2024. While total sales fell 5% compared to the previous year, the company's performance remained consistent with market expectations.

As part of the leadership changes, Gear4Music founder Andrew Wass will transition from his role as CEO to become the executive chairman in July 2024. The current chief commercial officer, Gareth Bevan, will take over as the new CEO. Additionally, Neil Catto, the former CFO of Boohoo Group and current CFO of Revolution Beauty Group, will join the board as the senior independent director and audit committee chair.

The reshuffle also sees the departure of non-executive chairman Ken Ford and non-executive director Dean Murray, who have served on the board since the company's IPO in 2015. The changes aim to ensure continuity within the leadership team while supporting Gear4Music's long-term growth strategy.

Why this matters: The leadership reshuffle at Gear4Music comes at a critical time for the company as it navigates the challenges of the post-pandemic retail landscape. The appointment of Andrew Wass as executive chairman and Gareth Bevan as CEO signals a focus on continuity and experience to drive the company's future growth and profitability.

Despite the slight decline in overall sales, Gear4Music emphasized its success in improving gross margins and profitability while cutting costs and prioritizing cash generation. The company's gross margin rose to 27.3%, up from 25.7% in the previous year. Gear4Music also significantly reduced its net debt to £7.3 million, down from £14.5 million a year earlier, surpassing market expectations.

CEO Andrew Wass expressed confidence in maintaining a trajectory of profitable growth, backed by strategic investments in the company's e-commerce platform and high-margin product categories. "We are well positioned to build on the results achieved in FY24 and deliver on our long-term profitable growth strategy," Wass stated.

Looking ahead, Gear4Music expects to report adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of £9.8 million for the financial year, up from £7.4 million in the previous year. The company also anticipates adjusted pre-tax profits of around £1.3 million.

The leadership changes and financial targets demonstrate Gear4Music's resilience and adaptability in a challenging retail environment. With a focus on profitability, debt reduction, and strategic investments, the company is well-positioned to capitalize on the growing demand for online musical instrument sales and maintain its position as a leading retailer in the UK and Europe.

Key Takeaways

• Gear4Music reports £144.4M in sales, down 5% YoY, but consistent with expectations.
• Founder Andrew Wass transitions to executive chairman, Gareth Bevan becomes new CEO.
• Gear4Music improves gross margins to 27.3% and reduces net debt to £7.3M.
• Expects £9.8M EBITDA and £1.3M adjusted pre-tax profits for FY24.
• Leadership changes aim to drive long-term profitable growth amid post-pandemic challenges.