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Beales pre-tax losses reduce by 35%

Independent department store chain Beales said like-for-like sales rose 2.8% at Christmas and that full-year pre-tax losses reduced by more than a third.

In the five weeks to January 2, like-for-like sales, excluding VAT, rose 2.8% at the department store retailer.

In the full year to October 31, pre-tax losses reduced by 35% to £990,000.

Total group like-for-like sales in the year were down 0.7% to £47.6m, reflecting the lower percentage of concessions in the sales mix as Beales focuses on improving own-bought merchandise.  

Own-bought sales in the year increased by 0.5%. Concession sales declined by 6.4%, which Beales attributed to a number of brands entering administration in spring 2009 including Principles, Bay Trading and Viyella.

Gross sales excluding VAT but including concessions dropped 2.8% on the year. However, with VAT at the lower rate of 15% for eleven months of the year, like-for-like gross sales including concessions were down 4.5% to £85m.

Full-year gross margins dropped from 54.9% to 54.5%. The retailer has improved buying-in margins and inventory levels were 2.5% below last year.

Administrative expenses reduced by a further £800,000 and net year end debt dropped by £1.4m to £6.4m.

However, sales in the first two weeks of January were adversely impacted by the snow, resulting in a like-for-like drop, excluding VAT, of 3.4% in the first eleven weeks of the financial year.

Beales chairman Mike Killingley said: “We expect 2010 to be another challenging year for retailers, as continuing high unemployment and increasing taxation levels affect both spending power and consumer confidence, with the added political uncertainty of a general election this spring.”

Chief executive Tony Brown said: “Whilst losses are never desirable to report, despite the backdrop of the recession we have managed to significantly reduce our losses. We will continue with the strategy employed in 2009 through 2010, which I believe will be another challenging year for retailers. We have set ourselves the target of significantly reducing our losses again and I am confident that we will achieve this objective despite the adverse economic environment.”

The retailer announced that buying and merchandising director Barbara King left the business at the end of December. Beales in the process of recruiting a replacement.

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