Bonmarché warns on profits again, citing 'unprecedented' high street conditions

13th Dec 2018 08:35

(Sharecast News) - Bonmarché's shares dived on Thursday after the company warned profits will be lower as store sales are hit by Brexit worries and "unprecedented" high street trading conditions.The women's fashion retailer said that it had remained optimistic for a strong sales resurgence over the Black Friday period but had instead seen "extremely poor" sales for the traditionally busy event and the weeks that have followed, despite attempts to entice customers through the doors with "extensive" discounts.A statement from the company said that, given the poor sales performance and assuming no significant improvement before the end of March, full-year underlying profit before tax is now expected to swing to a figure between break-even and a loss of £4m, way down from previous estimates of a £5.5m profit.Helen Connolly, chief executive, said: "The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/9. I hope that in the fullness of time, our cut to the forecast may prove to have been overdone, but in the current market, this seems the appropriate stance to adopt."The retailer also cited the "uncertainty surrounding Brexit" as a significant factor affecting demand and stated that the fact that there is no visibility as to when this matter will be resolved is a reason for caution."I believe that Bonmarché is well prepared to weather the storm, and that we can look forward to some recovery in FY20. Accordingly, the board remains confident in the strategy, and in the company's long-term prospects," said Connolly.The company added that it will review its progressive dividend policy in the light of full-year results and said that its cash reserves are expected to meet liquidity requirements even at the lowest end of the profit before tax range.Bonmarché's shares were down 36.65% at 51.00p at 0908 GMT.