Variety store group Instore has halved its losses in the first half to August 25, but does not expect the benefits of its improvement strategy to have a full impact until next year.
Chief executive Peter Burdon, who took the helm after Seaham Investments acquired a 30 per cent stake in May, said his priority had been to improve profitability as quickly as possible.
Lower markdowns, reduction of shrinkage and cost-cutting all played a part in improving margins. The introduction of food and toiletries has increased footfall, but their lower margins mean that overall margin will be flat in the second half.
Staff numbers have been cut by 50, resulting in an exceptional charge of£1.7 million, but there will be a saving of£2 million in annualised payroll and£1 million in other costs.
Instore posted a loss after exceptionals of£5.3 million against£11.6 million in the comparable period. Sales rose by 4.5 per cent, or 4.3 per cent like for like, to£133.8 million.
In the first seven weeks of the second half, total sales growth slowed to 2.7 per cent and comparable store sales to 2.8 per cent.
Burdon said: “We are making significant changes and have seen signs that our gradual renewal of the product and pricing offer is being reflected positively in our trading performance.
“As always, the final outcome for this year will depend on the key Christmas trading period. Nevertheless, I am confident that the benefits will show through progressively over the next 12 months.”
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