Business

Bonmarché shares plunge after warning of potential £4m losses

Womenswear chain Bonmarché has warned that it could post a £4 million annual loss following unprecedented tough trading conditions

WOMENSWEAR chain Bonmarché has seen its shares crash after warning it could slip to a £4 million annual loss amid "unprecedented" tough trading conditions.

The group's chief executive Helen Connolly said conditions on the high street are worse than those seen during the recession sparked by the financial crisis.

Bonmarché saw shares plunge 37 per cent, having opened as much as 50 per cent lower, after it estimated the group will at best break even, but could slip to an underlying pre-tax loss of £4 million for the full year.

It said like-for-like sales are expected to fall around 12 per cent in its third quarter and drop 1 per cent in the final three months.

Ms Connolly said: "The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/09.

"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 full-year 2020."

Bonmarché's gloomy alert comes after it said trading during the Black Friday trading week was "extremely poor", with ongoing subdued demand despite "extensive" discounting.

It blamed Brexit for adding to the consumer woes.

"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," Bonmarché said.

Last month, the group posted a 45 per cent drop in pre-tax profits to £2.3 million in the half-year to September 29.

Online sales were up 28.9 per cent but store like-for-like sales fell 4 per cent in the half-year.

Bonmarché, which had already warned over profits in September, had been hoping for a pick up in demand during and after Black Friday, assuming shoppers were delaying purchases until the November discounts.

But the bounce-back did not arrive and Bonmarché said consumer behaviour is not following last year's pattern, "nor the pattern of any year we have experienced previously".

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