Asprey spreads to pounds 12.2m: Attallah sees lower margins as the price for a broader base

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The Independent Online
TEMPTING a wider range of customers to splash out on upmarket baubles is boosting sales at Asprey, owner of the Crown jewellers, which yesterday reported a 9.5 per cent rise in pre-tax profits to pounds 12.2m at the halfway stage.

But Naim Attallah, the chief executive, admitted that the strategy was cutting margins. 'The strategy is to broaden the customer base. We must be less vulnerable to the whims of a few people. Once that strategy is in place, margins are bound to drop. If you broaden your customer base, you have to compete with others who are targeting the same people.'

The group has bought a number of jewellery chains to reduce its reliance on sales at the flagship Asprey store in Bond Street. These have included Watches of Switzerland, Mappin & Webb - which owns Garrard, the royal jewellers - and more recently Les Ambassadeurs, a Swiss watchmaker, and Tomasz Starweski, the dress designer. Mr Attallah said the group was still looking for acquisitions 'but not big ones. We have not reached our target of broadening our base'.

Group sales to September rose by 45 per cent to pounds 60.2m, with the Asprey shops in Bond Street, Geneva and New York up 30 per cent. But margins were reduced, partly because of higher promotional activity. 'Even upmarket customers want value for money, and are more aware of what they are getting for the price,' Mr Attallah said.

The group is still working on improving performance at Garrard and Mappin & Webb, which boosted sales by 18 per cent and 24 per cent respectively. It does not disclose profits by businesses, but said that profits for all chains were higher, except Watches of Switzerland, where the performance was flat. Les Ambassadeurs 'made a good start with a pleasing level of turnover and profit contribution'.

Interest receivable dropped by pounds 100,000 to pounds 1.3m. Earnings per share were up 15.3 per cent at 8.04p and the interim dividend is increased by 13.6 per cent to 1.25p. Smith New Court, the house broker, is forecasting pounds 25m pre-tax profits for the full year, up from pounds 21.6m last time.

In June, the group graduated from the unlisted securities market to a full listing, after Sears, the retail group, sold its 25 per cent stake. The shares closed 2p higher at 315p.

(Photograph omitted)