Bonmarche warns on profits as weather dampens sales, clouds outlook

21st Sep 2016 08:11

(ShareCast News) - Befuddled by the inconsistent weather so far this year, over-50s clothing retailer Bonmarché cut its full year profit guidance after like-for-like sales continued to suffer in the second quarter.Profit before tax for the year to 31 January is now expected to be in a range between £5m and £7m.Having blamed wet weather for a difficult start to the year, the company again bemoaned the atmospheric conditions as it warned like-for-like sales for the six months to 24 September had fallen roughly 8%, with recent balmy September days not helping sales of its new autumn ranges."The hot weather conditions have resulted in the strong sales of residual summer stock however, and this will result in an end of season summer stock holding which is below last year's level, despite the generally poor summer season," it said.The recent hot weather has created "considerable uncertainty as to market conditions" as it has meant management has not been able to gain much insight on the shopping public's feelings about the autumn clothing ranges other than a perception that the clothing market has generally has become more challenging."The board's view is that in the light of September's result, and its generally less optimistic view of market conditions, it is appropriate to lower the profit expectation for the second half of the year," the company said.Chief executive Helen Connolly, who was poached from Asda in March, said she remained confident the business will resume growth during the next financial year once she has finalised and begun implementing her strategy."I was attracted to Bonmarché by its potential to grow as a business serving the 50 plus women's value clothing market," she said."My early impressions of the business have underpinned this, and I am currently formulating my plans for the future. The direction of travel is right, but the effectiveness of execution needs to improve. My plans are therefore likely to focus on improving the clarity of the customer proposition and operational improvements in all channels rather than a major strategic repositioning."Shares in Bonmarche fell 25% to 85.95p by 0930 BST on Wednesday, having touched an all-time low of 80p earlier, representing a 56% fall in the year to date and a 65% decline since floating at around 230p in late 2013.