High street retailer Alexon revealed today that a disappointing performance at brands including Dolcis over Christmas had left it with an unexpected amount of unsold stock.
Alexon said it was taking “appropriate action” to shift surplus items but insisted that its operating profits for the year to January 28 would be within current market expectations.
Strong margins and sales growth at womenswear chain Bay Trading were offset by the weak performances of its Dolcis footwear stores and menswear ranges compared with last year.
Trading at Alexon Brands was satisfactory overall even though the launch of the new Mandolin range had failed to live up to expectations, the Luton-based company said.
This left like-for-like sales 2.1% lower during the 23 weeks to January 7 – a worse performance than the 1% decline seen over the previous six months.
Alexon, which has more than 360 shops and 1,000 concessions in the UK, said its gross margin was likely to be level with last year and operating profits should be between £19.5m and £20.5m.
This compared with £31.6m in the previous year before exceptional costs of £2.2m were taken into account.
Seymour Pierce analyst Rhys Williams said profits were unlikely to rebound significantly over the coming 12 months because of pressure on the consumer and competition on the high street.
But a brighter note was sounded by Panmure Gordon analyst Justin Scarborough who continued to recommend that investors buy shares in the group.
He said: “Alexon may not be a high fashion, high profile clothing retailer in the UK, but it has a wide range of formats that should enable the company to deliver a steady sales performance under most retail conditions.”
Seymour Pierce analyst Rhys Williams said profits were unlikely to rebound significantly over the coming 12 months because of pressure on the consumer and competition on the high street.
But a brighter note was sounded by Panmure Gordon analyst Justin Scarborough who continued to recommend that investors buy shares in the group.
He said: “Alexon may not be a high fashion, high profile clothing retailer in the UK, but it has a wide range of formats that should enable the company to deliver a steady sales performance under most retail conditions.”
References: EGi News 10/01/06
