Etam continues talks with bidders

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The Independent Online
Etam, the troubled womenswear retailer, said yesterday it was continuing to hold talks with potential bidders for the company, but declined to divulge the identity of any of the suitors.

"These proposals are being actively considered and a further announcement will be communicated to shareholders as soon as possible," Nick Hollingworth, Etam's managing director, said yesterday. News that the company was in bid talks was first announced last month.

The most likely bidders, according to market sources, include House of Fraser, New look and a US footwear retailer, Nine West.

Meanwhile, the company yesterday reported a loss of pounds 7.8m for the half- year to 9 August, one third larger than in the equivalent period last year. Turnover was down 6 per cent, rent and rates edged higher and staff costs went up nearly 5 per cent. Gearing and interest charges rose, although capital expenditure was cut from pounds 4.5m to pounds 2.8m and the number of shops was pruned from 221 to 214.

Sales were adversely affected by the cool, wet weather in June, and extra mark-downs on prices were needed to clear unsold stock. In the first four weeks of the second-half, sales of autumn stock were depressed by unseasonally good weather and the impact of the funeral of Diana, Princess of Wales.

Trade had since improved and like-for-like sales in the past eight weeks had been 4.4 per cent ahead of last year, Mr Hollingworth said.

Seven recently refurbished "new format" stores, including four entirely new shops which have been promoted using the actress Patsy Kensit, are performing above budget. The three existing stores converted to the new format are trading "considerably above budget" and independent market research shows the new shopfit and the improved range of merchandise are bringing lapsed customers back to Etam, according to yesterday's statement.

The shares fell a further 1.5p to 118p, a far cry from the peak of 280p three years ago.