Bonmarché has recorded a decline in its interim profits as boss Helen Connolly says “weaker consumer sentiment and footfall” hurt store sales.
The fashion retailer posted a 21% decline in underlying pre-tax profit to £3.3m in the 26 weeks to September 29, exacerbated by a 3% drop in like-for-like sales.
Overall revenue was flat year-on-year at £97.9m, with online sales growth of 29% offsetting the decline of store sales.
Overall, ecommerce sales accounted for 12% of Bonmarché’s revenue.
The fashion retailer, which issued a profit warning in September, said that despite declines in its physical sales almost all of its stores remain profitable.
Chief executive Helen Connolly said “providing that sales during the key Black Friday through to Christmas trading period meet expectations”, the retailer’s adjusted profit forecast for the current financial year remained unchanged at £5.5m.
The retailer delivered a margin increase of 170bps during the period due to “better buying and stock management”, but this was offset by adverse currency exchange conditions which resulted in a fall in gross margin to 57.2% from 57.8%.
“While store trading has been impacted by the general weaker consumer sentiment and footfall seen across the market, we have continued to improve our proposition, particularly our digital capabilities and with a broader, modernised product offer, which is reflected in our strong online performance,” said Connolly.
“We remain focused on exploiting the opportunity afforded by the increasing demand for online shopping, and are encouraged by customers’ responses to new ranges such as denim, leisurewear and resortwear.
“Despite the challenging market, the health and fundamentals of the business remain strong and the board remains confident in the strategy and in Bonmarché’s long-term prospects.”