viewBonmarché Holdings plc

Bonmarché warns on profits and loses chief executive

Discount fashion retailer blames mild weather for tough trading

Broker warns mild weather may spark more profit shocks from outfit retailers

Discount fashion chain Bonmarché (LON:BON) blamed mild weather for a profit warning and said its chief executive was quitting, sending its shares tumbling.

The stock plunged 88.5p, or 30%, to 209p after the over-50s women's clothing retailer said trading following Black Friday on November 27 had been tough.

In its half-year results last month, it said business had been challenging due to very mild, wet weather, but said it still expected to hit annual targets provided trade "normalised".

But on Wednesday, Bonmarché said business had not returned to usual and was unlikely to do so for the rest of the winter season.

It said it had therefore revised its profit forecast for the year to between £10.5mln and £12mln, rather than a previous consensus forecast of £13.4mln.

Bonmarché also said chief executive Beth Butterwick was stepping down after four years with the company to take up the equivalent role at rival Karen Millen.

An affiliate of private equity group Sun Capital Partners bought Bonmarché out of administration in 2012 and the group floated on AIM in 2013 before moving to the main market.

Chairman John Coleman said: "Beth has imbued Bonmarché with a sense of energy and purpose, and today the business is well-placed for long-term success."

At Karen Millen, Butterwick replaces Mike Shearwood, who stepped down earlier this year as chief executive of Icelandic-backed Aurora Fashions, owner of Karen Millen and other fashion brands.

He failed to win support from shareholders for a management buy-out of the business, most of whose brands Aurora bought from the administrators of Mosaic Fashions following the collapse of Icelandic investment firm Baugur, which owned 49% of the company, in 2009.

Broker Shore Capital said it believed Bonmarché's proflt warning could herald more similar announcements as mild weather hits clothing chains.

Analyst Clive Black said: "We do not believe Bonmarché’s warning and disappointment will be the last to be recorded by British retailers with a high participation in calendar fourth quarter and the festive season."

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