Women's value fashion retailer Bonmarche (BON:AIM) takes a battering, sold down 30% to 208.5p on a full-year profit warning and shock CEO departure. Sales have disappointed since Black Friday, not helped by high temperatures which are crimping clothing sales and imply a negative read-across for rival apparel retailers this Christmas.
Today's negative news double-whammy is a blow for investors in West Yorkshire-headquartered Bonmarche. One of Shares '15 for 15' selections, we admire the company's focus on a growing, resilient over-50s female fashion niche and growth potential via new store openings combined with product range and online development.
At last month's mellow interims (23 Nov), the retailer referred to a challenging November caused by 'very mild, wet weather', yet assured that so long as trading conditions normalised, it could still achieve full-year profit forecasts.
Unfortunately, unseasonably warm, wet weather conditions have persisted, forcing Bonmarche to cough up a warning just three weeks later – the assumption is higher markdowns will be needed to shift unsold lines.
December trading conditions, particularly since disruptive US promotional import Black Friday, 'have been very challenging, and have not normalised. The board's view is that these trading conditions are likely to continue for the remainder of the winter season and it has therefore revised its profit expectations for the current financial year. Given the ongoing volatility of trading conditions, the board considers it likely that the PBT will be within the range of £10.5 million to £12 million.'
Broker Investec Securities had been looking for growth in pre-tax profit from £12.4 million to £13.4 million for the year to March. It has downgraded its estimate by 20% to £10.8 million, slashed its price target from 325p to 245p and also placed its rating under review.
Investors are also reeling from the news Beth Butterwick is to step down as CEO after four years at the helm in order to join Karen Millen as CEO. The one-time Marks & Spencer (MKS) graduate trainee-turned-head accessories buyer led the company's turnaround, paving the way for its acquisition by an affiliate of Sun Capital Partners in 2012, followed by an IPO on Aim in 2013 and more recently, promotion from the junior exchange to the Main Market.