Bonmarché has seen shares almost halve in value after the fashion retailer warned it could swing to a full-year loss, citing “extremely poor” Black Friday Sales and continuing Brexit uncertainty.
In a trading update this morning, the womenswear retailer said it now expected underlying profit before tax to be in the range of breakeven to a loss of £4 million for the current financial year.
Additionally, Bonmarché said like-for-like sales were expected to plummet by 12 per cent in its third quarter and slide one per cent in the final quarter.
The news comes after a previous profit warning back in September saw Bonmarché forecast underlying profit before tax of £5.5 million.
“Sales during the Black Friday week (ending 24 November 2018) were extremely poor, particularly in the retail stores, suggesting that consumer behaviour is not following last year’s pattern, nor the pattern of any year we have experienced previously,” the retailer said in its trading update.
“Further, sales have not recovered since Black Friday, despite the application of extensive discounts.
“Consequently, we have concluded that sales will not recover to normal levels in the short term, and that it is appropriate to make a further revision to the forecast.
“We believe that uncertainty surrounding Brexit is a significant factor affecting demand and, therefore, that it may not strengthen until the current period of heightened uncertainty ends.
“As we have no visibility of when matters will be resolved, we have taken what we believe to be a cautious approach to our forecast and assumed that sales will not show any significant improvement before the end of March 2019.”
Bonmarché chief executive Helen Connolly said: “The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/9.
“I hope that in the fullness of time, our cut to the forecast may prove to have been overdone, but in the current market, this seems the appropriate stance to adopt.
“I believe that Bonmarché is well prepared to weather the storm, and that we can look forward to some recovery in FY20.
“Accordingly, the board remains confident in the strategy, and in the company’s long-term prospects.”