The greetings card operation had been part of the struggling retailer’s plans for international growth, following its announcement in January of plans to launch in the US and expand in Australia.
However, the stateside venture was received poorly and, compounded by increasing bad debts and poor returns in the UK, led the retailer to begin a managed closure of the entire operation.
The decision will impair goodwill and intangible assets of Greetings Direct by£11.5 million and is likely to affect Flying Brands’ pre-tax profits by about£1.5 million.
Landsbanki cut its 2009 profit estimate by 20 per cent following the news. Analyst Paul Deacon said: “We assume no more dividends in the near-term and believe this sad equity story could be coming to a head.”
Tricia Killen joined the group last month as chief executive and Deacon said she will be under pressure to come up with ideas and deliver value to investors after many years of struggle.
No comments yet