Department store Selfridges saw profits slide in the first half of the year as the company counted the costs of its demerger from retail group Sears and a drop in sales.
The store – featured in the latest fly on the wall documentary series, The Shop – floated on the stock market earlier this year.
In it first results as an independent company, Selfridges reported half year profits of £1.9m, against £6.7m at the same stage last year.
Figures included £6.3m exceptional costs, including £4.8m costs for the demerger and reorganisation and £1.2m for its new Manchester store.
Trading profit before tax and one-off charges was also down, from £9.2m to £8.6m, as sales fell from £133m to £127m, broadly in line with City expectations.
Sales were hit by refurbishment of its flagship Oxford Street store in London, where, it said, fashion sales were below expectations, partly because of the poor weather.
Almost 90 years after American entrepreneur Henry Gordon Selfridge opened the first store, the second branch was opened this month as one of the key retailers in the new Trafford Centre in Manchester.
It said sales in the first few weeks of business at the new 160,000 sq ft store were encouraging and well up to expectations. It expected the Manchester branch to make a contribution to profits by the end of 1999.
Chairman Alun Cathcart said: “This has been a year of unprecedented change and progress within Selfridges, with many of the changes already beginning to produce results.”
Shareholders get a maiden interim dividend of 1.6p. The first half of the year saw the company’s performance affected by major changes to its computer systems for buying and merchandising, warehousing, sales and accounting.
At its Oxford Street store, the company has refurbished the china and glass department and next month will complete the refurbishment of its womenswear department, followed by the beauty department in November. In the first eight weeks of the second half of the year, the Oxford Street store saw sales rise by 3% against the same time last year.
The company said that during the second half of the year it would continue to cut costs and improve efficiency at Oxford Street, and would analyse sales at Manchester to achieve the best mix of products as soon as possible.
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EGi News 30/09/98
