Beales, the independent department store chain, has reduced its full year losses for the third year running.
In the 52 weeks to October 30, losses before tax dropped 32% to £670,000.
Gross sales, which include concessions sales and VAT, increased by 2.7% to £87.25m. Group sales were up 2.1% at £48.6m. Like-for-like sales dropped 2.1%.
EBITDA was £1.5m during the period, up from the £1.2m recorded in the previous year.
Gross margins declined from 54.5% to 53.7% on a like-for-like basis.
Gross sales including VAT during festive period in the five weeks to January 15 were 16.3% ahead and 4.6% ahead during the 11 weeks to the same date. The retailer was impacted by the snow in November and early December.
During the year, Beales acquired two stores in Hexham in June and Rochdale in September.
Beales chairman Mike Killingley said: “The increase in VAT on January 4, and the effect of the Government’s tighter fiscal policy, continues to make the retail sector challenging. Despite this, we believe that our trading strategy will generate further improvements in the group’s underlying performance. We shall also continue to seek new opportunities to increase the size of the group with the acquisition of additional stores, which could be managed without a material increase in the size of our head office.”
Chief executive Tony Brown added: “It has been a seminal year for Beales…We continue to challenge our cost centres and have been able to reduce the cost of doing business, which we will continue to focus on.”
Brown added that the business’ buying margins have continued to improve following a review of Beales’ own bought product mix, supplier base, trading terms, concession mix and an improvement to stock management.
Brown said: “Since my last statement, the economic outlook has changed significantly following the General Election. Quite simply it is hard to forecast the public’s reaction to the spending cuts and the increased VAT.
“We will continue to monitor our customers’ reaction to these changes and adjust our trading strategy accordingly but in my view it will continue to make our customers cautious throughout the year.
“Our increased focus on purchasing from the Far East has assisted us to date in achieving increases in our input margins; however, the euro/sterling exchange rate continues to be disadvantageous to us and I cannot see this improving in the near term.”