If only fashion retailers could recoup a pound for every time they used words like “challenging”, “difficult” and “turbulent” in their financial statements.
There is no doubting that each of those adjectives aptly sums up what has been a hugely testing 2016 for the sector, but few businesses could argue that they have found the going harder over the past 12 months than Bonmarché.
Almost a year ago to the day, the plus-size fashion specialist posted a 15.6% slump in half-year earnings, as pre-tax profits tumbled to £5.4m.
However, it insisted the decline in its bottom line was driven by investments in the implementation of a new delivery service into its stores, the pilot of a new TV advert, the launch of a responsive website and a clutch of senior hires, made in a bid to strengthen its marketing and multichannel operations.
But store like-for-likes have also been going in the wrong direction.
Last December, the business was forced to issue a profit warning, blaming “very challenging” trading conditions during the Black Friday period that had “not normalised” in the weeks that followed.
The stark warning wiped almost a third of the value off its market cap in a single day, as its share price tumbled from 297.5p to 210.5p – and it has continued a gradual decline ever since.
Bonmarché’s announcement of the appointment of Asda executive Helen Connolly as its new boss sparked a slight uplift at the end of March, but the 188p its share price reached in early April remains the peak of a tough calendar year.
“Just three months into the job – and with Bonmarché posting half-year results next week – Connolly will already be under pressure to communicate her vision sooner rather than later”
The share price nosedived as low as 84.1p earlier this month in the wake of another profit warning in September, when Connolly said she would provide a “more comprehensive” update on her plans for the retailer “in due course.”
Just three months into the job – and with Bonmarché posting half-year results next week – Connolly will already be under pressure to communicate her vision sooner rather than later, in order to stabilise the share price and reassure understandably jittery investors.
But her plan may need to be a radical one in order to breathe new life into a business that currently appears to be gasping for air.
Not a good market
Last month’s eye-watering Kantar Worldpanel data revealed that £700m was slashed from the value of the fashion market in the 52 weeks to September 25 – and in a world where fashion giants such as Next, Primark and H&M are all finding trading conditions tough, Connolly has her work cut out.
She will quickly need to provide reasons for shoppers to return to Bonmarché. It would be no surprise to see improvements in its range, price architecture and the in-store experience cropping up towards the top of her immediate agenda.
Mother Nature – who seemingly has a seat on the executive board of every UK fashion retailer – may have lent a hand in recent months, delivering colder, more seasonal weather during October and November to help fashion chains shift their winter stock.
But with conditions on the high street having become even more turbulent over the past 12 months – thanks in no small part to the impact of the Brexit vote on currency and consumer confidence – it could prove to be another black Friday and gloomy Christmas for Bonmarché.
The big question is whether Connolly can transform its fortunes by inspiring a prosperous and happy new year.