Beaverbrooks maintains its sparkle despite profit slump

AWARD-winning family-owned jewellery retailer Beaverbrooks saw its profits slump as the recession dented consumer confidence last year.

While sales of £82.4m were largely flat on the 2008 figures, profits slid from £4.6m to just £177,000. Stripping out an exceptional £2.5m gain last year, profits were still £2m down in what the directors said was a “disappointing performance”.

But it was not all gloom for the Lancashire business, which was founded by three brothers Isaac, Harry and Maurice Adlestone in 1919 –  as it was named the best company in the UK  to work for by the Sunday Times.

In their report for the year to the end of February the directors – led by managing director Mark Adlestone- said the business had been a victim of the economic storm which erupted last autumn.

“The very serious problems encountered within the banking sector from September 2008 onwards, coupled with the UK economy’s slide into recession in the last quarter of 2008 and the ensuing tightening of of available credit lines for consumers made for very difficult Christmas trading period.

“In common with many other retailers there is still a great deal of uncertainty concerning UK economic growth and consumer spending over the next 12 months and the directors are of the opinion that the next financial year could be as difficult and challenging as the 2009 year.”

The St Annes-on-Sea based company opened four new stores during 2008, in High Wycombe, Bristol, Livingston and in London’s prestigious Westfield shopping centre.

It now trades from 66 shops and employs 760 people.

Despite the fall in profits Beaverbrooks maintained its strong support for charities, contributing more than £500,000.

Mr Adlestone, whose father Gerald is chairman, said trading conditions in the run-up to this Christmas were still challenging, but the business is in better shape than last year after a cost cutting drive, which has included a pay freeze and reining-in spending on shop refits to conserve cash.

He told TheBusinessDesk:”We have taken out more than 30 jobs through natural wastage –  there have been no redundancies and we have all taken a pay freeze which has significantly enhanced our cash position.”

He said the group would continue to invest in its online offering and said trading had not been helped by a “stratospheric leap” in the price of gold in the last year.

He said Beaverbrooks was “delighted” to have been named the best company to work for, and that as a private, family business its goal, as well as making money is to “enrich lives”.

“We are very proud of out commitment to charity. As well as financial contributions each member of staff is given two days a year to work with a local charity and we have seen an amazingly good take-up of a payroll charity giving scheme, which shows that our staff are sharing our values.

“The financial figures I know don’t look pretty but there’s a lot of good work going on in terms of social capital and that is important for us.”