The home shopping specialist said that its Netherlands-based hamper business, Farepak, declined as consumers moved away from the market in favour of gift vouchers. Turnover for this part of the business continued, while operating profits declined significantly. As a result, Kleeneze decided to close hamper production at Farepak and outsource this part of its operations.
In addition to the associated charges this will incur, Kleeneze has decided to integrate its internet and TV shopping arms ahead of the planned timeframe. Consequently, the retailer said group results for the closing financial year will be below the board's expectations.
The retailer said: 'The board remains confident of future prospects, especially as our largest business, Kleeneze Europe, is expected to perform in-line of expectations for the year and into the current financial year.'