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Bonmarché warns on profits

Bonmarché has issued a profit warning for the full year citing “extremely poor” Black Friday Sales and ongoing Brexit uncertainty.

The value retailer now expects underlying profit before tax to be in the range of “break even” to a loss of £4m for the current financial year.

It previously expected underlying profit before tax of £5.5m.

In a statement the retailer said: “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.

“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.”

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 2019/20. Accordingly, the board remains confident in the strategy, and in the company’s long-term prospects.”

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