Shares in Bonmarché were up by almost 7% this morning (25 January) after trading over the peak Christmas period came in marginally better than expected.
The UK value women’s wear retailer last month warned it could swing to a full-year loss following “extremely poor” Black Friday sales and the uncertainty surrounding Brexit.
It now says total sales for the 13 weeks ended 29 December tumbled 8.1% against the corresponding period of last year, while like-for-like store sales were down by 11.1%. Online sales for the period increased 22.2%.
Bonmarché adds that trading during the final three weeks of the third quarter remained in line with revised expectations. A slight improvement in footfall towards the end of the month resulted in the like-for-like store sales figure being marginally better than the negative 12% expected.
Online sales continued to grow strongly during the period, albeit at a lower rate than in the first half of the year. Gross margin during the period remained in line with revised forecasts and were below last year due to additional discounting and expected exchange rate headwinds.
Looking ahead, the retailer said its winter sale has begun well, and it continues to trade in line with the revised guidance given in December.
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“Clearly, in the short time since our last update, macro market conditions have not changed, but I am pleased that the sale stock is clearing well and that trading is in line with our revised expectations,” says CEO Helen Connolly. “In the short term, we continue to focus on ending the year with a clean stock position and ensuring that our balance sheet remains healthy.
“Looking forward, the board remains confident in Bonmarché’s prospects and strategy and we will continue to drive the implementation of our previously outlined plans, maintaining a particularly strong emphasis on increasing multi-channel sales.”
Maureen Hinton, group retail research director at GlobalData, notes “yet again” Bonmarché’s third-quarter has dragged down its overall performance year to date, with its customers not engaging with its offer during the important festive season.
“Even its online business had a lower growth rate than the rest of the year. This suggests either it is just not producing a compelling enough autumn/winter range for its customers, or that the demographic is just not interested in adding yet more higher-priced winter garments to their wardrobe. The latter reason could be a factor in both N Brown’s and M&S’ poor performance over the period – though neither’s was as bad as Bonmarché’s.
“Though clothing retailers across the board have been reporting that November was very poor and there has been extensive discounting, most are still producing positive sales for the quarter, even though mainly driven by online, and few have given a profit warning, which makes Bonmarché one of the worst performers over the period. Its challenge now is to produce sales no worse than its forecast -1% in the fourth quarrter to stay within its profit forecast range.”