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Bonmarché blames challenging retail market for lower first half profits and sales

"Despite the challenging market, the health and fundamentals of the business remain strong and the board remains confident in the strategy and in Bonmarché's long-term prospects,” said chief executive Helen Connolly
Bonmarche
Bonmarche left its full year guidance unchanged

Bonmarché Holdings plc (LON:BON) said a challenging market for bricks and mortar retailers dragged sales lower in the first half.

The clothing retailer posted total revenue of £97.9mln for the six months to September 26, broadly in line with the previous year, but like-for-like sales dropped 1.0% as a 4% decline in-store-only sales offset a 28.9% jump in online sales.

Underlying profit before tax fell to £3.3mln from £4.2mln a year ago.

Stores continued to account for a large chunk of total sales. The online arm represented 12% of overall sales in the first half, compared to 9% last year.

READ: Bonmarche slumps as warm weather and weak demand lead to profit warning

The weakness at stores reflects the pressures facing UK high street retailers from the shift to online shopping and subdued consumer spending.

"Whilst store trading has been impacted by the generally weaker consumer sentiment and footfall seen across the market, we have continued to improve our proposition, particularly our digital capabilities and with a broader, modernised product offer, which is reflected in our strong online performance,” said chief executive Helen Connolly.

"We remain focused on exploiting the opportunity afforded by the increasing demand for online shopping, and are encouraged by customers' responses to new ranges such as denim, leisurewear and resort wear."

She said providing sales during the key Black Friday through to Christmas trading period meet expectations, the board continues to expect an underlying pre-tax profit of £5.5mln for the 2019 financial year.

"Despite the challenging market, the health and fundamentals of the business remain strong and the board remains confident in the strategy and in Bonmarché's long-term prospects,” she added.

Bonmarché declared an interim dividend of 2.5p, unchanged from last year’s payout, and expects to maintain its full-year dividend at 7.75p. 

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