Womenswear retailer Monsoon must update its product offer and resolve distribution issues if it is to halt sliding sales, City analysts have said.
The retailer posted another set of disappointing results for the year to May 26, 2007. Pre-tax profits were down 14% to £53.5 million, while like-for-like sales fell 13% for the seven weeks to July 15.
Chairman Peter Simon said the results were "clearly very disappointing".
Seymour Pierce analyst Andrew Wade said the product needed to be moved on to fit more closely with current trends. "A couple of years ago the boho look, which Monsoon does really well, was very popular. But now the demand is for a more tailored image," he said.
The buying director of one high street chain said Monsoon's recent poor performance was not necessarily all due to fashion mistakes in its ranges. "Compared with other fashion retailers, Monsoon's look is quite summery. It concentrates heavily on skirts and dresses and other softer looks, so it has really been hit by the weather," he said.
Wade added that increased competition from the high street and value retailers, as well as distribution problems at the retailer's new centre, had added to Monsoon's woes. "There have been issues with the right stock not being in the right stores at the right time," he said.
Monsoon decided to close its two standalone menswear shops, in Newcastle-upon-Tyne and London's Covent Garden, last week. But it insisted it would continue to stock the menswear ranges in 49 UK stores.
"In the coming year we will focus closely on our brands - product, merchandising and sourcing - to ensure we meet the challenge of ever-tougher competition," said Simon. "All of this work will hopefully come to fruition in the long term, but the current trading outlook gives us little cause for immediate optimism."
- Pre-tax profits down 14% to £53.5m for the year to May 26, 2007
- Turnover up 9% to £530.5m for the same period
- Total sales for the seven weeks to July 15 down 5% on last year
- Like-for-like sales down 13% for the same period
MONSOON'S SIGNATURE: A CLOSE-UP VIEW
Drapers assistant features editor Charlotte Marrion on Monsoon's autumn collection
"Daywear pieces such as graphic-print tunics, skinny jeans and shawl-collared cropped jackets underline Monsoon's more directional ambitions for autumn. But similar styling and quality can be found at any high street womenswear store - and at much cheaper price points.
"Denim from £38 and a simple bell-sleeved dress at £65 aren't wallet-busting prices, but neither do they challenge high street rivals in terms of price or styling.
"Monsoon's signature look of ethnic-inspired embroidered silk dresses has made it a favourite for wedding guests, affordable eveningwear fans and bridesmaids, and served its shoppers well during the boho revival in 2004. But the commercial boom on retro-inspired dresses across all trend-led market sectors hit Monsoon where it hurts.
"The 1970s-inspired halterneck maxi dresses and strapless prom styles in the autumn range are already too ubiquitous to make an impact. Compromising its niche personality in a bid to keep up with high street fashion is a natural knee-jerk reaction. Whether it will attract enough new shoppers to make up for the existing ones it alienates remains to be seen."