Department stores group Beatties posted a sharp fall in annual profits today, after seeing sales slide in its West Midlands heartland.
With the impact of the new Bullring shopping centre in Birmingham in September 2003 still being felt, Beatties said group profits before exceptional items fell by £1m to £4.2m in the year to 31 January.
Sales in the West Midlands region – at Birmingham, Wolverhampton, Solihull and Sutton Coldfield – fell 3.7% in the period and were only partly offset by a 2.3% improvement from its six sites outside the region.
Excluding the Birmingham store, where losses widened by £300,000 to £1.9m, the three core West Midland stores saw profitability fall 10%.
Beatties said trading conditions across the sector remained challenging, with total sales down 2.3% in February and March, but added that it had resisted the temptation to join rivals in discounting.
Chief executive Brian Heilbron, who took the helm two months ago, is conducting a review of the business and its merchandising strategy.
He is due to report in the summer, but has already expanded the group’s range of brands, which includes Jane Norman, Hobbs, Warehouse and Hackett.
Mr Heilbron said: “There are few indicators which suggest that the retail environment in 2005 will be more favourable than in the year just ended. However, we are fortunate to have such a robust business which, we all believe, is capable of trading through such times.”
Today’s figures also include a provision of £3.2m against the carrying value of its Birmingham store, which opened in September 2001.
This was offset by profits of £2.7m from a property disposal, as Beatties posted bottom-line profits of £3.7m, against £5.2m a year earlier. The company maintained its final dividend at 8.4p a share.
Beatties, which is listed on the stock market under the name of its founder James Beattie, began life as a drapers shop in Wolverhampton.
It also has sites at Aylesbury, Birkenhead, Burton, Huddersfield, Northampton and Worcester.
References: EGi News 06/04/05
