Sales slump for Bonmarche amid 'challenging' market
Womenswear retailer Bonmarche has reported a slump in annual sales following a difficult start to the new year, and warned it expects further challenges in the months ahead.
In a trading update, Bonmarche said total sales in the 53 weeks to April 1 slumped 0.5%, while like-for-like store sales took a 4.3% plunge, as trading conditions worsened after a Christmas boost.
Even when accounting for a 2.2% rise in online transactions, total like-for-like sales were still down 3.8% over the period.
Chief executive Helen Connolly said: "As anticipated, trading conditions post-Christmas continued to be challenging, but this was accounted for when we issued the revised profit guidance last September, and therefore the final result for the year is in line with our expectations.
"Store like-for like sales were negative in January but stronger during February and March, and we also saw the resumption of growth in online sales following improvements made to our online offering."
The company's board has nudged up its expectations for full-year pre-tax profit excluding exceptional items, saying it will be "slightly above the mid-point" between £5 million and £7 million.
However, Ms Connolly, who took up her role at Bonmarche last year, warned the retailer was preparing for further hurdles in the year ahead.
Ms Connolly said: "Whilst we expect the apparel market to remain challenging during the coming financial year, we are actively taking measures to improve our proposition to customers.
"We remain confident that Bonmarche remains unique in its ability to serve the needs of its target market and that the successful implementation of our plan will allow us to deliver growth in full year 2018, despite the challenging market."
Retailers are expected to struggle over the next few years, as inflation, sparked by the post-Brexit vote collapse of the pound, starts to weigh on household spending.
The Bank of England expects inflation to reach 2.7% by the end of 2017, before peaking at 2.8% in the first half of 2018 and easing to 2.4% by 2019.
Bonmarche, which has 327 stores and concessions across the UK, is set to publish its full-year results on June 19.
Mark Photiades, director of equity research covering the general retail sector at Cantor Fitzgerald Europe, said Bonmarche is "making good progress" despite recent challenges.
"Today's update shows that trading has improved over the final quarter and FY17 results are likely to be slightly ahead of market expectations.
"The last 18 months have been challenging for Bonmarche with profitability suffering significantly.
"However, the new CEO is making good progress on sourcing efficiency, improving the quality of the ranges and obtaining the best terms with suppliers.
"Retail disciplines are also in the process of being strengthened and brand awareness is increasing helped by the Bonus Club loyalty scheme."