The Moray-based firm labelled 2024 a “challenging year” for the global luxury sector.

Annual sales at the firm dropped by 6% to £94.2m, a decline from £100m the previous year.

New accounts filed with Companies House reveal that demand decreased more than expected in 2024, forcing the firm to restructure parts of the business and absorb increased overheads, including wage inflation. 

Issues at the firm were made clear in September last year, as the firm announced plans to cut more than 60 jobs at its Moray mill.

Despite such problems, however, the firm’s retail division had a strong performance, with turnover increasing by 4%. 

Managing director Johanna Wallace said the business entered 2024 expecting further growth, but demand quickly fell away due to global economic uncertainty and changing consumer behaviour.

Writing in the company’s strategic report, she said: “It took time to react to the subsequent downturn shift in the market, resulting in inefficiencies in our mills and some restructuring costs.”

Looking forward, however, she added: “Following the slowdown in 2024, we expect the luxury market to recover to a more stable long-term growth trajectory, albeit at a slower rate than we have seen in the past decade. We continue to invest in additional capacity to meet the future growth demands of our private label clients and the Johnstons of Elgin brand.”

Despite the downturn, chief executive Chris Gaffney said the company remains focused on long-term strategy. This includes investing £4.7m in capital projects, including expanding capacity at both mills and upgrading machinery.