Teal Group, the employee-owned parent of toy retailer The Entertainer, grew sales by 10 per cent to a record £315.0m in the year to 31 January 2026 (2025: £286.6m), according to group accounts filed at Companies House on 4 November.
The group, which also owns Early Learning Centre and Addo Play and holds a global licence for Meccano, reported an operating loss of £16.8m, compared with £8.4m a year earlier. Loss before tax was £19.0m (2025: £10.1m). Adjusted EBITDA was £2.9m.
What drove the loss
Teal Group said higher employment costs, its exposure to business rates increases, depreciation and exceptional costs, including the move to employee ownership, weighed on profits. It also took a non-recurring £5.4m cost of setting up its biggest retail partnership.
Changes to its operating model applied only in the last four months of the year. The board estimates EBITDA would have been £7.7m had they applied for the full year.
Trading since the year end
- Like-for-like sales in The Entertainer’s own stores rose 22 per cent in the first half of the current year.
- Sales across all channels rose 13 per cent.
- The board expects a significant improvement in profitability this year.
The changes followed the transfer of ownership from the founding Grant family to an employee ownership trust at the end of September 2025. That allowed The Entertainer to open its stores on Sundays for the first time and to widen its ranges. The group has also cut its active suppliers by more than 20 per cent, closed almost all loss-making stores, invested £5m in lower prices and restructured to take £10m out of operating costs from 2027/28.
Group chief executive Andrew Murphy said the year was “a story of two parts”, with record sales while employment costs, business rates and one-off expansion costs pushed profits the other way. He said like-for-like sales were still running well ahead of last year going into Christmas.
The Entertainer is planning several new store openings in 2027, at least three of them in UK top 20 retail locations.
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