Alexon sales tumble

Alexon's interim management statement said like-for-like sales at the fashion group, which includes brands Bay Trading, Ann Harvey, Dash and Eastex, fell 11 per cent during the period.

The retailer said trading during October and November became “increasingly challenging across the retail sector and in common with many other retailers we have seen a deterioration in sales performance to a level slightly below our expectations”.

Alexon reported a 6 per cent fall in like-for-likes in the eight weeks to September 20. Gross margins at that time were level with last year.

However, Alexon said today that gross margins were 1 per cent lower during the 17-week period as it minimised stock ahead of the spring season, particularly at Ann Harvey and Bay Trading. Earlier this month, it was revealed that Alexon had tightened supplier terms at both fascias. Alexon said that increased promotional activity in department stores added to the margin decline.

Group stock levels are lower than last year and it expects to end the year with terminal stocks “well under control”, it said.

Alexon said it was cautious about the outlook for the full year, which is “dependent on the Christmas trading period”.

The retailer said: “We are confident that the strategy we are implementing will strengthen the business. We have strengthened the management team, who are focused on achieving brand clarity, and delivering improved product value through enhanced supply chain management, all of which will better position the group for the future.”

Singer Capital Markets analyst Matthew McEachran said the performance implies a 13 to 14 per cent like-for-like decline at the group over the past nine weeks.

“New management has their work cut out, but the group should still have net cash and be net cash positive next year,” he said.