Festive sales boost eludes listed retailer after ‘extremely poor’ Black Friday trading

Womenswear retailer Bonmarché is forced to change its financial forecast for the current financial year after performing “extremely poor” during the key trading period from Black Friday through to Christmas.

At the half year mark, the Wakefield-headquartered retailer saw online sales rise by 28.9%, but store like-for-like sales decreased by 4%.

Bonmarché also reported a 45.2% drop in pre-tax profit to £2.3m, compared to the £4.2m achieved at the same period last year.

At this time, the retailer announced that the underlying pre-tax profit for FY19 will be £5.5m if sales met expectations during the period from Black Friday to Christmas.

This forecast assumed that demand would follow the pattern experienced last year when, during the earlier part of November, customers delayed purchases in anticipation of being able to take advantage of Black Friday discounts.

However, the retailer has announced that sales during the Black Friday week, which ended 24 November, “were extremely poor, particularly in the retail stores, suggesting that consumer behaviour is not following last year’s pattern, nor the pattern of any year we have experienced previously.”

Sales have not recovered since Black Friday, and as a result the retailer has had to make a further revision to the forecast.

Bonmarché now estimates that underlying pre-tax profit will be in the range of breakeven to a loss of £4m for the current financial year.

In a statement, the retailer said: “We believe that uncertainty surrounding Brexit is a significant factor affecting demand and, therefore, that it may not strengthen until the current period of heightened uncertainty ends.

“As we have no visibility of when matters will be resolved, we have taken what we believe to be a cautious approach to our forecast and assumed that sales will not show any significant improvement before the end of March 2019.”

Helen Connolly, chief executive of Bonmarché, added: “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.

“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.”

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