Pre-tax profit at department store chain Beales dropped to £543,000 for the 26 weeks to May 2, down from £881,000 the previous year. Sales were also knocked by the collapse of several key concession partners.
Total revenue, which includes sales from own bought product and commission from concession sales, was broadly flat at £26.7 million compared with £26.8m for the same period of the previous year. Beales’ like-for-like gross sales, which include sales via its concessions, dropped 2.4% over the period.
Concession sales dropped 6% following the administration of key partners including Elvi, Principles, Viyella and Adams Kids. These have been replaced with new concessions from Joules, Chilli Pepper, Craghoppers and own label Crimson.
Beales said that own bought product, especially menswear, had seen good growth, and that the management team would focus on improving bought-in margins to support a promotional strategy without affecting gross margins.
Beales will also launch the new George Davies brand GIVe in its stores on October 1. The company said it had been pivotal in helping the develop the operational model for the brand, which is an innovative profit-sharing model.
Inventory levels were 13% lower on May 2 than the same time last year. Operating cost were below those of last year, the company said.
Beales said that it expected extremely challenging trading conditions to continue in the second half of the year but that based on current trading and detailed forecasts, the group expected to continue to meet its financial covenants in the foreseeable future.
Chairman Mike Killingley said: “The key to improving the fortunes of our group remains to increase sales while improving margins. We are continuing to pursue aggressive promotional strategy, growing our buying-in margins and focusing on cost control. When the economic environment improves, we are confident that the action being taken will enable us to restore the group to full year profitability.”