The increase, which beat expectations, is good news for the retailer, whose stock has fallen more than 70 per cent since May last year.
Sales at Findel’s home shopping arm were 3 per cent ahead of last year and bad debt fell in line with management expectations.
Citigroup analyst James Targett said that, although decreasing bad debt was welcome, the trend should be treated with caution. He noted: “This is not a busy period for Findel – unlike September to November – and the extent of bad debts is not realised until several months after.”
Numis analyst Nick Coulter was confident that Findel was approaching its busy period with a solid strategy. “As we enter the key pre-Christmas catalogue season, Findel is positioned for a soft market with low levels of new customer recruitment and flat stock commitments,” he said.
Findel chief executive Patrick Jolly agreed that the next few months will be the acid test for how the economic downturn is affecting his customers.
“We have been planning for contingencies if retail is soft,” he said. “We are cautious about recruitment of new customers and won’t be chasing sales unless the environment improves. We will concentrate instead on more sales from existing customers.
“We have washed out the bad debts that caused us problems in March and are not taking on people with low credit scores.”
Jolly also said Findel will not be looking at more brands at present, but concentrating on the organic growth of its existing businesses.
Findel’s biggest catalogue mailing of the year will be sent out next week, including a new look for its Cotswold Company furniture catalogue.
Jolly said that “middle England” had been hit worst by the consumer downturn. “We are lucky, because we have other arms such as our credit business, which is doing well to counterbalance it,” he said.