Bonmarche shares out of fashion with investors despite sales defying mild autumn weather
Bonmarche's share price fell almost five per cent this morning despite the women's clothing retailer posting a jump in sales as efforts to revamp its stores and make its product ranges more fashionable paid off.
The retailer, which has 300 stores but also sells online, through mail-order catalogues and a TV channel, said total revenue increased by 6.5 per cent to £97m in the six months to 26 September, with like-for-like sales up by two per cent.
Underlying pre-tax profits edged up by 0.4 per cent to £6.4m, the company said.
Bonmarche listed on Aim in 2013, a year after being rescued out of administration by private equity firm Sun European Partners.
Under chief executive Beth Butterwick's management the company has turned its fortunes around, after launching a new website this summer – an area previously dismissed as too young for Bonmarche's 50-plus target market – and improving both product and the store portfolio.
Butterwick said like-for-like sales had improved after launching a lighter autumn range that was less reliant on cold winter weather after last year’s autumn heatwave.
However, she warned that trading in the quarter has nevertheless been tough: “Trading conditions during November have been challenging, due to very mild, wet weather. Our expectations for the full year remain unchanged, provided that trading conditions normalise for the remainder of the financial year."
Eight new stores and concessions were launched in the period and the company said it is on track to refreshing 140 existing shops by the end of the year with new branding.
Bonmarche launched a test TV advertising campaign in September in the north of the country in an attempt to widen its appeal to win over new customers. The company said the results were “promising” but it still had to wait and see whether long-term benefits were worth the investment.
Investec retail analyst Kate Calvert said: "A good first half performance against tough comparatives is reassuring, in our view.
"More recent trading conditions are flagged as challenging due to very mild, wet weather seen in November but we make no changes to forecasts. Longer-term, management continues to invest in an expansion of its estate, make amendments to ranges and invest in the brand and its infrastructure, allowing for future growth."