The parent company of popular high street retailers Monsoon and Accessorize has publicly criticised Chancellor Rachel Reeves' recent Budget, warning that newly introduced tax increases are forcing the business to halt investment in its growth.
Budget Impact on Business Strategy
Adena Brands, which is owned by retail entrepreneur Peter Simon, confirmed in its latest financial accounts that it is "focusing on reducing our cost base over investing in growth" until clear signs of strengthening consumer demand emerge. The company explicitly stated this shift in strategy directly responds to "the likely impact of tax increases" announced in the Budget, adding that it doesn't anticipate improved consumer conditions over the next twelve months.
The business, which began its current financial year in September, reported experiencing "continued subdued consumer spending and the impact of cost increases" throughout the period. However, despite these challenging conditions, the company noted it is seeing "positive results from the investments made last year" and is making planned gains in both sales and profitability.
Financial Performance and Challenges
The company's financial accounts, made public on Companies House and signed off by its board on Wednesday, reveal a remarkable turnaround. Adena Brands returned to profitability with a pre-tax profit of £957,000 for the year ending 30 August 2025. This represents a significant recovery from the pre-tax loss of £7.5 million recorded in the previous financial year.
Turnover also showed improvement, increasing from £204.6 million to £212.1 million during the same twelve-month period. The company identified several key challenges that impacted its operations, including cost inflation driven by continued minimum wage increases and what it described as "the ripple effect as those increases impact salaried employees."
Additional factors affecting performance included the impact of National Insurance tax increases on wages and business rates rises throughout the period.
Timing Criticism and Consumer Impact
Adena Brands didn't hold back in its criticism of the government's timing, describing this year's Budget - delivered by Rachel Reeves on Thursday - as having "terrible timing for all consumer businesses."
The company argued that widely trailed messages about broad tax increases ahead of the official Budget announcement had already been "hurting consumer demand as consumers prioritise saving over spending in anticipation of a harsh Budget." This pre-emptive reaction from consumers created additional headwinds for retail businesses already navigating difficult trading conditions.
While celebrating its return to profitability, the company's statements highlight growing concerns within the retail sector about how tax policies and consumer confidence will shape business investment decisions in the coming year.
