Investment Column: Oasis pays for Spice Girls error

Oasis is putting a brave face on the marketing mistake it made in the spring when it assumed that Spice Girl mania was a passing fad and failed to stock enough skimpy skirts and tops to satisfy its middle- market customers in the 18 to 35 age range.

But the market has judged the company harshly and the shares fell 18p to 246.5p, down 40 per cent from the peak last February.

Turnover in the half year to 26 July was 20 per cent higher than a year previously at pounds 39.6m, including a 6 per cent increase in like-for-like sales. But costs were up 30 per cent, margins were slashed and profit before tax was down 29 per cent to pounds 3.7m.

The second half got off to a good start for Oasis, but the shock death of Diana, Princess of Wales, adversely affected appetites for buying fashion clothes, and since then unseasonally warm weather in the past month has affected demand, leaving like-for-like sales unchanged on last year.

Analysts were marking their forecasts down yesterday to around pounds 15.6m for the full year, or 19.9p of earnings, which rates the shares on barely 12 times prospective earnings. Wait for signs of recovery.