UK: Former M&S Supplier Announces Substantial Losses

Daks Simpson has made an operating loss of £55,000 compared with a profit of £319,000 in the previous equivalent six-month period because of the loss of its contract with Marks & Spencer, the company revealed today. Daks Simpson had been a major supplier to M&S for 28 years, producing men's suits, jackets and trousers. The company also blamed the strength of sterling in the European wholesale markets, and the closure of unprofitable retail concessions.The company's profit on ordinary activities, after taxation, was £197,000 (1999 - £330,000), and turnover declined to £27.2m from £32.8m.The retail business opened two new UK standalone shops in Manchester and Cheltenham this March. These outlets are further supported by the new DAKS Group flagship store in London's Old Bond Street, which opened in September.The group said that the restructure of its manufacturing division continues. One factory has already been closed following the loss of the M&S contract. The costs of this restructure were provided for in the year ended 31 January 2000.The Group's net asset position, including cash liquidity, remains strong and shows an increase to £33.7m compared with £22.8m at 31 July 1999. This is supported by the sale of the Group's interest in the former Piccadilly store in the year ended 31 January 2000.Dividends paid on the preference shares during the half year ended 31 July 2000 amounted to £6,250 (1999 - £6,250). No interim ordinary dividend is proposed.