Clinton Cards warns on second half outlook
Greeting card retailer Clinton Cards made a pre-tax loss of £3.7 million in the six months to end January having made a profit of £11.7 million in the same period a year earlier. The group warned that the outlook for its full-year results is worse than previously expected.
Like-for-like sales fall by 1.1% in the 26 week period but transaction levels remained the same with spend per head decreasing by 1%.
Clintons said like-for-like sales were up 11.8% in the first eight weeks of its second half but cautioned that last year Mother's Day was two weeks later and was therefore outside the eight week comparable period. After adjusting for the timing of Mother's Day, the underlying trend is down by 4%.
Total revenue from the Clinton brand was £171.7 million compared to £178.3 million from 21 fewer stores than last year. Adjusted operating profits fell to £0.7 million from £14.4 million a year ago.
The group said its margins were significantly weaker as a result of clearing old stock in the January sale and an increase in lower margin gift sales throughout the half.
For the group’s Birthdays chain, total revenue was down to £25.5 million compared to £28.6 million in the same period last year. This represented a reduction in like-for-like sales of 2.1%.
Clintons said its strategic review, which is being led by chief executive Darcy Wilson-Rymer, was on track for completion at the end of April and would begin to benefit the business from the end of the second half in July.
Wilson-Rymer is examining all aspects of the group's activities including customer experience, store portfolio, business efficiency, and digital offering, as well as the future of the Birthdays chain.
The group, which operates 628 Clintons stores and 139 Birthdays outlets, said it would engage with its stakeholders, including lenders, when the review is complete.
Chief executive Darcy Willson-Rymer said: "This has been a challenging period in a difficult retail environment, dominated by weak consumer confidence.
"The outlook for the second half of the current year is below our previous expectations. The significant changes we are undertaking within the business, and those we will announce following the completion of the strategic review, will begin to benefit the business from the end of the second half and will position the business for long-term growth."
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