Bonmarché shares surge on back of positive results

Shares at womenswear retailer Bonmarché have jumped more than 14% after its announcement this morning that first half revenues were up 5% following a surge in online sales.

The retailer’s share price is up 12.9p to 101.9 pence per share after it reported a rise in revenue for the 26 weeks to the end of September to £97.8m (FY17 H1: £93.1m).

Bonmarché reported combined like for like (LFL) sales growth of 4.3%; store-only LFL sales up 1.6%, while online sales were up 38.6%.

In line with board expectations, profit before tax came in at £4.2m (FY17 H1: £2.0m), while basic earnings per share was 6.8p (FY17 H1: 3.1p).

The results would have been welcome news for chief executive Helen Connolly, who was instated last year at the Wakefield-based retailer, and was forced to oversee a profit warning last September which caused its share price to dive more than 30% to an all-time low. Its share price dropped 35p to 80p in the first hour of trading following the trading update in which it described that month’s sales as “extremely poor”, marking a tough 12 months for the retailer, which was trading above 300p in late 2015.

However, Bonmarché is now seeing its turnaround strategy take shape, as it continues to grow its market share in a “difficult trading environment” and that progress has been made in each of the company’s five key strategic areas – product, online, loyalty, stores and systems/processes.

Product highlights include a relaunched “higher quality, more authentic, denim range”, the group said, while strong online growth was driven by multiple improvements to customer experience and supported by stronger product ranges.

Connolly said: “I am satisfied with the progress made during the first half of the financial year. I have been encouraged by the way the teams have worked cross functionally to deliver an improved product offer and a better experience for our customers, whether in store or online.

“We are only at the beginning of the journey in some areas of our strategy and there is a strong plan to support future growth. I do not expect the clothing market to become any less challenging in the near future, and therefore remain focused on continuing to grow by profitably gaining market share.”