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flag Step One Clothing lost $8.5M in first half of 2026 due to inventory costs and higher logistics, despite strong indirect sales and a growing customer base.

flag Step One Clothing reported an $8.5 million net loss for the first half of fiscal 2026, down from an $8.2 million profit a year earlier, due to a $10.9 million inventory provision, slower clearance of legacy stock, and higher logistics costs. flag Revenue dropped nearly $12 million as the company reduced discounting to rebuild brand equity. flag Despite weaker results, indirect sales surged 75.9% year-on-year, driven by Amazon, John Lewis, and TikTok Shop, while new product lines in socks, pyjamas, and women’s period products gained traction. flag The company remains debt-free with $24 million in cash, maintains a 100% dividend policy, and plans to focus on brand advertising, customer acquisition, and expansion in the U.K. and U.S. flag Customer retention held steady at 65%, and the customer database exceeded 1 million.

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