Lace losses hit Sherwood profits

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The Independent Online
DIFFICULT trading conditions for its European lace companies helped to undermine profits at Sherwood, the UK lingerie group, writes Martin Flanagan.

This was compounded by weaker demand for UK garments, triggering a sharp fall in interim pre-tax profits to pounds 5.9m ( pounds 7.7m) in the six months to July.

Earnings per share fell from 4.8p to 3.1p, but the interim dividend rises to 1.15p against 1p.

David Parker, chairman, said that on the positive side Lepel, Sherwood's branded bra and lingerie company acquired in May 1993, had performed well and in line with expectations.

After adjusting for Lepel, overall UK garment sales were 6 per cent down. Meanwhile, the socks business faced the threat of higher levels of imported socks.

Turnover in UK lingerie was lower than last time, although sales of ladies' swimwear were up significantly, with orders for the coming season also substantially higher.

Sherwood said it was trying to raise its share of the US lace market, but was unlikely to see the benefits of the marketing and sales promotion until 1995.

Meanwhile, the group said the restructuring and cost-cutting in its lace companies in mainland Europe would be completed by the year-end. It is expected there will be significant job losses.