Mosaic Fashions, the company behind Oasis, Karen Millen and Coast, saw group sales fall 1.2% for the 23 weeks to January 3, and said that profits would be below last year.
Mosaic Fashions said that international retail sales rose by 15% over the period and internet sales were up by 71%.
The company said in a statement that although the key Christmas period had started slowly, it had seen strong reactions to its strategic promotional activity in the lead up to Christmas which had successfully driven sales. However, it gave no figures as to Christmas performance apart from to say that stock levels following the post-Christmas Sale were 30% below last year.
The statement went on: “The well documented collapse of the Icelandic banking system has generated significant challenges for the business in the period. The withdrawal of credit insurance from the business in October due to its links with Iceland put pressure on the creditors position. However, management have addressed this proactively, working together with suppliers to ensure delivery of goods to normal terms. The administration of Kaupthing Singer Friedlander has resulted in the loss of the company’s foreign exchange hedge which will dilute profits this year and have a more significant impact next year.
“The management team has implemented a range of measures to ensure the company is well-placed to weather the current challenging conditions in the UK market, including successfully moving 85% of its landlords to monthly rents by the December quarter day. The company’s lenders, Kaupthing Bank, remain supportive and the company is in ongoing discussions about the long term financing of the business.”
“The combination of the severity of the downturn in the UK and global economies and the challenges the business has faced since the collapse of the Icelandic banking system mean that the company expects full year profits to be below last year.”
Mosaic Fashions chief executive Derek Lovelock added: “Despite the recent economic slowdown felt by retailers generally and the impact of the Icelandic banking crisis which has uniquely affected Mosaic, our results remain encouraging. This is due to the excellent performance and hard work of our teams, the support of our suppliers and partners, and the strength of our brands.”