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Bonmarché Holdings plc

Bonmarché hit by "too hot" September as shares melt 22%

Trading in September was described as “extremely poor”. As a result underlying sales for the second-quarter of the financial year were down 8%, as were like-for-like revenues for the first half of the firm’s financial year.

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Low, low prices: The shares fell than 20% in early trade.

Around a quarter was wiped off the value of the discount womenswear chain Bonmarché Holdings PLC (LON:BON) after it sounded the earnings alarm.

To cut the story to its bare bones, the summer was too cool and the early autumn too hot to shift its seasonal lines. That said, the late Sahara blast did have the upside of shifting some of the excess summer stock.

Trading in September was described as “extremely poor”. As a result underlying sales for the second-quarter of the financial year were down 8%, as were like-for-like revenues for the first half of the firm’s financial year.

Interim profits are likely to be in the order of £5-£7mln, Bonmarché said, compared with a pre-exceptional £6.4mln a year earlier. The dividend will be held at 2.5p.

There is a lot for new boss Helen Connelly, previously the buying and design director at George at Asda, to get her teeth into.

“The direction of travel is right, but the effectiveness of execution needs to improve,” she said.

“My plans are therefore likely to focus on improving the clarity of the customer proposition and operational improvements in all channels rather than a major strategic repositioning.”

At 8.25am the shares were changing hands for 89.4p, down 22%, having been off 26% earlier in the session.

Cantor Fitzgerald analyst Freddie George, who cut his target price to 80p from 130p in the of the profit warning, said Bonmarché lost momentum in the wake of its stock market listing last year.

“This news [the earnings alert] is likely to put the stock under cloud and it is unlikely to perform in the medium term, although it is relatively good value, and there is evidence of a recovery and a turnaround in sales,” he concluded.

Quick facts: Bonmarché Holdings plc

Price: £0.09

Market: LSE
Market Cap: £4.25 m
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