Bonmarché warns on profits as Brexit fears take toll

Bonmarché, which had previously expected to make a pre-tax profit of about £5.5m, now believes it will only break even and could even lose as much as £4m.

The retailer blamed a poor Black Friday period and Brexit uncertainty for its difficulties.

Bonmarché had previously said that while online sales growth had been strong, like-for-likes had been weak. The retailer needed to hit targets between Black Friday and Christmas to be confident of meeting profit expectations.

However, today Bonmarché revealed that sales during the Black Friday week were “extremely poor, particularly in stores, suggesting that consumer behaviour is not following last year’s pattern, nor the pattern of any year we have experienced previously”.

Bonmarché said: “Further, sales have not recovered since Black Friday, despite the application of extensive discounts. Consequently, we have concluded that sales will not recover to normal levels in the short term, and that it is appropriate to make a further revision to the forecast.”

Brexit fears were also blamed.

The retailer said: “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.

“As we have no visibility of when matters will be resolved, we have taken what we believe to be a cautious approach to our forecast and assumed that sales will not show any significant improvement before the end of March 2019.”

Bonmarché chief executive Helen Connolly said: “The current trading conditions are unprecedented in our experience and are significantly worse even than during the recession of 2008/9.

“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]. Accordingly, the board remains confident in the strategy, and in the company’s long-term prospects.”

More follows