Boden chief executive Julian Granville has said he is gloomy about prospects for the UK retail market, despite reporting strong growth.
He warned that the chancellor’s plans for tax rises and deep cuts in public spending would dent consumers’ disposable income.
Boden this week reported a 16% rise in pre-tax profits to £28.7m in the year to December 31, 2009, but Granville said: “I’m pretty pessimistic about short to medium-term prospects for the UK economy. The combination of spending cuts, the rise in VAT and other taxes and the inevitable rise in interest rates will combine to reduce disposable income in our target market and that of most retailers in the UK.”
However, Granville said he was confident that Boden would prove resilient to any further dip in the UK economy.
He said if Boden can “produce a product that is differentiated by the mass market by being unable to get it elsewhere” then the market will be even better for the retailer.
Boden sales surged 20.1% to £201.9m for the year, representing a 10.8% rise at constant exchange rates. Current trading has held up, with sales increasing 15% to June 30, with the UK market “strong”.
Granville said Boden had tentative plans to expand its online and catalogue business into a couple of northern European markets over the next year or two.