Allders warns of slow start to Christmas

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ALLDERS, the department store retailer, yesterday warned of a slow start to Christmas and said it was already making cutbacks in the face of weak consumer demand.

Reporting a 16 per cent fall in profits to pounds 19.4m, in line with a profits warning in August, Allders said it had made 60 staff redundant in the last two months and delayed the hiring of Christmas staff by a month to reduce costs. The company is also considering cutting its marketing budget for next year.

Reporting a 3.7 per cent fall in same-store sales in the last eight weeks, Allders said only a handful of departments had recorded sales gains. Beds were the best performer with a rise in sales of just 2 per cent. Lingerie, linen and menswear showed marginal gains.

Other departments have been hammered, with personal computer sales down by 50 per cent because of fierce competition. Allders has reduced the amount of floor space devoted to PCs and is likely to pull out of the sector completely this year. "Dixons has been doing well and there are new entrants like Tesco and Asda," said Allders' chief executive, Harvey Lipsith. "The competition is phenomenal and long-term we don't see a future for us in that market."

Mr Lipsith said he thought Christmas would be "late", with shoppers leaving their purchases until the last minute but he was optimistic about the January sales. "I thing 1999 is going to be a tough year but I don't think it's going to get any worse."

Allders has 38 stores spread across the country, including 18 branches of Allders at Home, which specialises in household goods. Mr Lipsith said the southern stores had performed no better than those in the north, which has been hit by a weakening manufacturing sector.

Allders said the year began well but sales drifted downwards after June as interest rates edged higher. Trading was also disrupted by a refurbishment programme and the relaunch of the seven former Maples stores acquired in September last year for pounds 3.8m.

The shares closed 3p lower at 93.5p.