Bonmarché issues profit warning after slower high street sales
Women’s fashion retailer Bonmarché has warned on profit after reporting that second quarter sales in its stores had been below expectations.
In a first quarter trading update in July, the retailer had said sales had been much better than in the final quarter of the previous year, particularly with regard to in-store like-for-likes. At that stage, it said it was confident of delivering further profit growth for the full year.
However, the company has now said that although second quarter online sales had performed well and in line with expectations, in-store sales had not maintained the same momentum as in the first quarter. The retailer attributed this to weaker footfall on the UK’s high streets but also said that extended warmer weather in the period meant that customers had delayed buying its early autumn stock.
Helen Connolly, Bonmarché chief executive, said: "These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Bonmarché'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 focussed on exploiting the opportunity afforded by the increasing demand for online shopping, whilst modernising the store offer and customer experience.”
Bonmarché is now expecting its underlying full year pre-tax profit to be approximately £5.5 million compared to £8 million in the previous year.
Connolly added: "Whilst it is disappointing that FY19's result is expected to be lower than originally planned, despite the challenging market, the health of the business remains strong: excluding the impact of the FX headwind, this year's underlying PBT expectation would be in line with the £8 million achieved in FY18.
"The board remains confident in the strategy set out in our FY18 results, and in the company's long-term prospects."
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