Arcadia shares tumble on warning of profits fall
Friday 19 November 1999
Arcadia said price discounting and promotions were driving margins lower although sales density was up 0.5 per cent in the first 11 weeks of the financial year. The news sent the group's shares tumbling 29.5p to 107.5p.
Arcadia said: "The directors believe that the trading performance, if sustained throughout the half, would result in first-half profits below expectations."
Arcadia said there were no plans to change strategy. "We intend to focus on pushing forward our pricing policy, and improving the performance of some of our weaker brands," it said.
Analysts said Arcadia is particularly vulnerable to market pressures because it is so highly operationally geared.
Matthew McEachran, of Investec Henderson Crosthwaite, also suggested that the group's acquisitive strategy had contributed to its problems. "You have to question the focus of a company with so many brands," he said. He added that many would favour the disposal of the company's non- core brands and stores, but Arcadia is restricted by its leasehold agreements.
Arcadia was formed last year following the demerger of Debenhams from Burton Group. Earlier this year, Arcadia bought womenswear stores including Wallis, Warehouse and Miss Selfridge for pounds 150m. Arcadia last month reported annual pre-tax profits of pounds 46.1m, down from pounds 81.1m a year earlier. Analysts have adjusted forecasts for the coming year from pounds 44m-pounds 66m, to between pounds 25m and pounds 40m.
Speculation was mounting yesterday that John Hoerner, Arcadia's chief executive, may be feeling pressure to resign. One analyst said: "He must be getting fed up. He has given the business his best shot, but he is struggling to see the light."
The London Stock Exchange is expected to investigate an 8 per cent drop in Arcadia shares on Wednesday afternoon.
- 1 Strictly Come Dancing 2014: Gregg Wallace joins line-up as final celebrities revealed
- 2 Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
- 3 Oil tanker with $100 million cargo goes missing off Texas coast
- 4 Saudi Arabia executes 19 in one half of August in 'disturbing surge of beheadings'
- 5 Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
YouTube video posted by Isis militants shows 'execution of 250 Syrian soldiers'
Keira Knightley topless: Usually conservative actress does own take on #Freethenipple campaign for Interview Magazine
Oil tanker with $100 million cargo goes missing off Texas coast
George Galloway left with severe bruising after attack in Notting Hill by man 'shouting about the Holocaust'
Brother and sister, Christopher Buckner and Timothy Savoy, arrested for 'committing incest after watching 'The Notebook''
Robin Williams Emmys tribute led by Billy Crystal criticised for including 'racist' joke about Muslim woman
The Rotherham child abuse scandal is a tale of apologists, misogyny and double standards
Scottish independence TV debate: Pumped-up Alex Salmond bounces back in bruising second round against Alistair Darling
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Do you realise just how foolish the UK looks?
With Douglas Carswell joining Ukip, my party has taken another giant step forward
- < Previous
- Next >
iJobs Money & Business
£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...
£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...
£60000 - £70000 per annum: Harrington Starr: A prestigious leading professiona...
£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...