Female fashion retailer Bonmarche has issued a profit warning, saying a weak high street and long summer have damaged demand at its stores.
The company said while its online channels remained on strong upward growth paths, high street stores had endured a tougher time than expected with trading “below expectations”.
It cited lower footfall and a warm end to the summer damaging demand for autumn ranges.
The value brand said it now expected underlying profit before tax during its full financial year to come in at £5.5m.
Analysts had been expecting a figure of around £9m.
Shares – down almost 40% so far this year – fell more than 20% in early trading on Thursday. They later settled 17% lower on the day.
Bonmarche issued the downgrade despite enjoying a better-than-expected first quarter.
It said it had taken the decision to lower profit expectations now – in its second quarter – rather than risk damaging future growth through major cost-cutting.
The company said some adjustments were to be made but it is understood those would not represent a threat to any of its 325 stores or jobs.
Not all fashion retailers are struggling.
One rival H&M, which has just under 300 premises in the UK, announced on Thursday a 9% increase in sales during its third quarter. Next said earlier this week that it had enjoyed a better summer than previously predicted.
The high street is tough – a consequence of consumers tightening their belts this year amid rising costs for stores.
It has left scores of chains facing difficulties.
Among the big names to be recently rescued is House of Fraser. Toys R Us and Maplin were among the early casualties.
Bonmarche chief executive, Helen Connolly, said: “These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Bonmarche’s store trading has been impacted by weaker consumer sentiment and footfall.
“We have continued to improve our proposition, particularly our digital capabilities, reflected in the strong online sales.
“We remain focused on exploiting the opportunity afforded by the increasing demand for online shopping, whilst modernising the store offer and customer experience.
“Whilst it is disappointing that FY19’s (full year 2019’s) result is expected to be lower than originally planned, despite the challenging market, the health of the business remains strong.”
From – SkyNews