Weather affects Alexon Group plc
Like-for-like sales for the three weeks from 23 November 2011 to 18 December 2010 are down 19.9% bringing the year to date like-for-like sales decline to 4.7%.
The Board expects this to impact profit expectations for the year ending 29 January 2011 by up to £1.5m. The Group has informed the Bank of the current trading situation. Whilst net borrowings remain comfortably within the Group's current facilities, the Group has commenced a dialogue in respect of one possible consequential technical EBITDAR covenant infringement. The Bank's response has been constructive and supportive.
The Group's customer base for its largest brands is predominantly an older demographic and as such, severe weather such as the recent snow and freezing temperatures has a disproportionate effect on sales. Furthermore, given their regional distribution model and the particularly severe weather in certain parts of the UK, a number of stores have been forced to close for several days. In each of the last three weeks, between 40 and 60 of the Group's outlets have been closed.
Whilst the impact of the severe weather is disappointing, the Group continues to make good progress with the strategic initiatives, including store refurbishments, the streamlining of its logistics function and the replacement of its legacy systems. In particular, the Group is successfully building its multi-channel capabilities, through further developing its online and mail order partnerships .Looking ahead, this strategy will help mitigate the impact poor weather conditions has on our business.
Online trading during the period, for example, has hit record highs for us up 129% for the three weeks to 19 December 2010. Accordingly we remain confident in the medium and long term prospects for the business.
The Retail Bulletin is organising their 2nd Multichannel Summit, to be held in London February 2nd 2011. The event is sponsored by k3 retail and will look at how retailers can maximize profits, market share and loyalty through cost effective, seamless, integrated multichannel strategies.
If you would like to attend as either a delegate or Networking Partner, go to www.retailbulletinconferences.com/multichannel2011
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