Bonmarché has followed up two profit warnings at the tail end of last year with a dismal update on Christmas performance.

The specialist clothing retailer posted an 8.1% fall in total sales year on year for the 13 weeks to December 29. That was highlighted by an 11.1% tumble in like-for-like store sales and a store and online like-for-like decline of 7.8%.

Online was the single bright spot, delivering a sales uplift 22.2%. Many chief executives like to point to rising online sales as a sign of their own unique success, as opposed to a general consumer trend, but unless online sales make up for the decline of bricks-and-mortar revenues – which in this case they clearly didn’t – a dearth remains.

Bonmarché has placed the blame squarely on the consumer climate, claiming that the “unprecedented” conditions were worse than even during the recession of 2008/09.

Brexit blues

Bonmarché blamed Brexit for much of the disruption and said it believed demand would not strengthen until the “heightened uncertainty” ends.

Brexit aside, Black Friday sales were “extremely poor”, the retailer admitted, and had not recovered by the time it updated the market in mid-December, even with the application of “extensive discounts”.

Despite Connolly’s no-nonsense rhetoric, it might be asked whether Bonmarché has a somewhat fuzzy grasp of its customer

While margin is too often hit by discounting, it is not always the case that sales fail to rise. Either Bonmarché’s consumer – older and value-conscious – is so cautious at present that they are not spending, or the discount is not sufficient to woo them, or the product, even at a discount, is not hitting the mark.

In all likelihood, it is probably a combination of the three: the consumer environment is unkind and is only likely to become more so in the run-up to March 29 – but, that said, is Bonmarché firing on all other cylinders? The suspicion must be that it is not.  

The decrease in sales is, unsurprisingly, accompanied by an anticipated fall in profits. They fell from £8m to just breakeven and may go into the red by up to £4m, over the golden quarter. At the same time, its share price has fallen, decreasing from a 52-week high of 125p to 36.5p at the time of writing.

Knowing the customer

Chief executive Helen Connolly has made several tough-sounding statements in her two most recent updates, taking the market and politicians to task.

“As we have no visibility of when matters will be resolved, we have taken what we believe to be a cautious approach to our forecast and assumed that sales will not show any significant improvement before the end of March 2019,” she said at the time of the interim results.

“I hope that in the fullness of time, our cut to the forecast may prove to have been overdone, but in the current market, this seems the appropriate stance to adopt.”

But despite Connolly’s no-nonsense rhetoric, it might be asked whether Bonmarché has a somewhat fuzzy grasp of its customer.

Bonmarché is attempting a difficult balancing act of maintaining its brand to appeal to existing customers and building it among a younger, though still mature, demographic. 

Under Connolly, the retailer has updated its customer profile to reflect its efforts to shift towards a younger consumer, but the language about its customer does not reflect a laser focus on that shopper.

The retailer’s vision – “to be the best place for feel-great fashion that real women love” – is anodyne at best and, quite simply, does not mean much.

This lack of definition is surely a core problem. Connolly is clearly an experienced operator with a great handle on value, having come from George at Asda. But Bonmarché urgently needs to decide who its customer is, and who she isn’t, if it wants to get more of them through the door.