Online sales drive 38% rise in profit for Bonmarché

Womenswear retailer Bonmarché has reported a 38% rise in pre-tax profit, driven by strong online sales growth against a backdrop of challenging trading conditions.

For the 52 weeks to the end of March, the Wakefield-based company posted profit before tax of £8m, up from £5.8m, while total revenue stood at £186m, down from £190m the year before.

The company said that, as expected, the retail clothing market remained difficult during the year but that while the high street challenges continued, online sales were more resilient, due to both the evolution of its customers’ shopping habits and the improvements it have made to its online store.

In the period, online sales were up 34.5%, making up 9.5% of total sales, but store like-for-like sales were down 4.5%.

While the retailer said store sales were disappointing overall, the performance was not even throughout the year. Store like-for-like sales were strong in the first quarter,  leading to a strong first half growth compared to the previous year, but store sales weakened significantly in the second half, with October, December and March being “especially poor”, the company said.

“Whilst opportunities remain to improve the proposition, the online performance suggests that the proposition was competitive, and we therefore conclude that external market factors were a significant contributor to the store performance,”Bonmarché  said.

Product highlights included a relaunched, higher quality denim and a more agile supply base enabling Bonmarché to react more quickly to customer demands, while the group also made improvements in customer service such as in-store ordering, a simplified loyalty scheme, and a greater focus on in-store customer service during peak shopping hours.

Helen Connolly, chief executive of Bonmarché, said: “Against the backdrop of challenging trading conditions, I am pleased that we have delivered an increase in profit before tax compared to last year.

“We have made good progress in all areas, particularly online, where we have seen strong growth, whilst also making improvements through a number of other self-help initiatives including the product proposition, the loyalty scheme, and developing a more agile supply base.

“Whilst we expect the market to remain difficult, trading since the beginning of the new financial year has been stronger than during H2 of FY18, and is in line with the board’s expectations. We have a clear strategy in place to continue to improve our proposition, which we expect to do during FY19 and beyond. We remain confident that with its unique offering, aimed at fashion and value conscious women, Bonmarché is well positioned for future growth.”

The company’s recommended final dividend increased to 5.25p per share, bringing the total for the 2018 financial year to 7.75p, an increase of 8.5%.