Asprey heads for pounds 10m loss

The disastrous run of news continued at Asprey yesterday when the jewellery chain disclosed that it would announce a pounds 10m loss later this week, writes Nigel Cope.

Asprey said that the losses for the year to March included provisions relating to stock and rationalisation costs.

The company was forced to issue the statement after weekend reports that the group, whose stores include Garrards, Mappin & Webb and Watches of Switzerland, was heading for further trouble after stocks had run out of control.

Asprey shares fell 13 per cent in early trading to 57p but recovered to close at 59p.

The company declined to elaborate on a brief statement, saying it would provide further details with its annual results on Thursday.

At the half-year stage in November Asprey's profits dived 75 per cent to pounds 3m while stocks had mushroomed from pounds 127m to pounds 147m. Two months ago Asprey warned that second-half profits would also be around pounds 3m.

The dive into the red marks the culmination of a series of problems. The company has been dogged by rumours that several big spending customers such as the Sultans of Oman and Brunei, have reduced their shopping sprees.

There has also been speculation that Asprey's move into more mass market operations such as Watches of Switzerland, had damaged the standing of a group that built its reputation as a vendor of upmarket trinkets to the royal and rich.

The shares have collapsed from 350p at the beginning of last year.

The company's chief executive, Naim Attallah, who pioneered the acquisitions, has said that the founding family might consider taking the company private to remove it from the harsh glare of the City.

John Rolls Asprey, chairman, who is a direct descendant of the store's founder, said at the time: "If this nonsense continiues then one's feelings towards the City are not as warm as they should be."

Mr Attallah anounced in May, his intention to leave the group at the end of next year and earlier this month the finance director, Nick Harrington, also unexpectedly resigned, citing personal reasons.

A rationalisation including some store closures has also been announced. Five branches of Watches of Switzerland are closing, reducing the number of outlets to 25. The Birmingham branch of Mappin & Webb is also to close just three years after it opened.

Mr Attallah acknowledged at the time that, with hindsight, some branches could have been closed earlier, but said "no one expected the recession to go on as long as it has".