Bad weather and BHS administration hit sales say Bonmarché bosses

FASHION retailer Bonmarché expected a tough year and the company, which specialises in over 50’s womenswear, has certainly got one.

Revenues were down for the 26 week period to 24 September 2016, from £97m in the same period last year to £93.1m this year.

Underlying pre-tax profits dipped to £2.5m for the half year, down from £6.4m – a 61.6% decrease.

Having launched its website in mid-2015, online sales for the interim period were down 1.1% but increased by 2.3% in Q2.

Market conditions continue to be “very difficult”  and a continued decline in market share was disappointing said the business. According to Kantar Worldpanel it declined from 3.3% to 3.2%.

It said the administration of competitor BHS had affected its performance, with BHS stores heavily discounting in the weeks prior to their closure in late April and May this year.

A cool summer was again blamed for poor sales in seasonal wear, and the introduction of the National Living Wage cost the company £600,000.

Despite this, the company still said that profit before tax is likely to fall between £5m and £7m, which it already announced in a profit warning in September 2016.

Helen Connolly, who took over from Beth Butterwick this year has only been in position four months, since August 2016. She rejected a strategy overhaul for the group, but said it needed to be more effective at the execution of turnaround plans.

Helen Connolly, chief executive of Bonmarché, commented: “I believe that Bonmarché has significant potential to grow as a retailer serving the 50 plus women’s value clothing market, a belief that has strengthened with my continued exposure to the business.

“Work has already begun, to modernise and simplify our operations and improve basic disciplines – key foundations for the more strategic priorities of developing the customer proposition and improving customer journeys.

“I have been encouraged by the enthusiasm and commitment of the Bonmarché team, and remain confident that despite the difficult trading conditions, the business will resume growth during FY18.”

Bonmarché’s share price plummeted on the announcement that Ms Butterwick would be leaving for Karen Millen last December and has since been unable to recover, falling to its lowest point in its history after the profit warning in September 2016.