Bonmarché shares sink on profit warning
Shares in womenswear chain Bonmarché fell 18% on Thursday after warning that profits would fall short due to weak consumer demand and warm weather.
The retailer said online sales had grown strongly in the second quarter of the year, but sales in stores had not kept up the pace of the first quarter. Full-year profits are now expected to be £5.5m, down from £8m last year. The Wakefield-based chain has more than 300 stores and a membership of 1.7 million for its loyalty scheme. Many retailers are struggling in the current trading environment, with several well-known chains closing stores and seeking a financial restructuring to survive. Department store group House of Fraser was bought by Sports Direct after running into difficulties, and earlier this month Debenhams rushed out a statement to try to reassure investors over its finances. Last week. menswear chain Moss Bros issued a profit warning, also citing the summer's hot weather as a factor for poor trading. However, not all retailers are in trouble. Earlier this week, fashion chain Next reported better-than-expected sales. 'Challenging times' In its latest trading statement, Bonmarché said: "The continuation of warm weather for an extended period may have delayed demand for early autumn stock, but we believe that the more dominant factor is that underlying consumer demand for the UK High Street is weaker which is impacting footfall." It had given an upbeat trading statement in July, in which it said trading had been "significantly better" than in the previous quarter, but trading since then has deteriorated. Helen Connolly, the company's chief executive, said: "These are undoubtedly challenging times in the retail industry and, in common with many other businesses, Bonmarché's store trading has been impacted by weaker consumer sentiment and footfall." However, she added that despite the "challenging market, the health of the business remains strong". Bonmarché, established in 1982, describes itself as "one of the UK's largest women's value retailers". Shares ended 19p lower at 84p, valuing the company at £43m.