Alexon Group is considering possible takeovers of the company as it issues a profits warning.
The womenswear group, which owns mainstream womenswear chains including Ann Harvey, Eastex, Alexon and Kaliko, responded to reports published in the Sunday Times that said it was on “a desperate search for cash to help it stay afloat” by issuing a statement saying that while it is exploring options, these form part of its ongoing capital restructuring plans for the company.
Alexon Group confirmed that one of its options includes considering takeover possibilities, and is in discussions with more than one party. However, it also said that no firm proposal has been received and that it is not definite that a formal offer will be made.
Alexon Group also said since its Interim Management Statement was issued on July 7, the trading environment has deteriorated, most notably in August. It said that sales during August were below the board’s expectations with the first three weeks of the month down 9% on a like-for-like basis.
Alexon said sales are now improving, with like-for-likes down 1% in the last week of August, but the retailer said the trading environment and outlook remains very tough and it is now forecasting that its performance for the year will be well below previous expectations.
Last year the group renegotiated its banking facilities and covenants with Barclays including an extra £2.5m one-year loan facility running until the end of April 2012.
Although footfall was down, the retailer said that online maintained its very strong growth, up 118% at the half year point and that the reshaping of the portfolio is on track with re-fitted stores and concessions continuing to significantly outperform the balance of the estate and the Kaliko and Alexon brands achieved double digit like-for-like sales growth.
Alexon also confirmed that the work which has been undertaken to develop each of the brands within the portfolio has resulted in it receiving a number of approaches for additional new business opportunities for Spring 2012. These offers are presently being scoped in the context of an ongoing portfolio re-shape.
Alexon Group owns 69 standalone stores across all of its chains in the UK plus a further eight clearance outlets. It also operates 819 concessions across all chains plus 14 clearance concessions.