New stores boost Tie Rack: Retailer says final results hinge on pre-Christmas spree

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The Independent Online
TIE Rack, the specialist scarf and tie retailer, yesterday added to the caution being expressed in the industry when it warned that customer confidence is 'somewhat fragile' in its markets both here and overseas.

The comments came as it announced that pre-tax profits in the 28 weeks to August had risen from pounds 301,000 to pounds 872,000 on sales 30 per cent higher at pounds 33m. Roy Bishko, chairman, said that trading in the second half was satisfactory, but the group makes more than 95 per cent of its profits in the second half - and a large proportion of that in the six weeks before Christmas.

The bulk of the sales increase, 12 per cent, came from new store openings, with currency chipping in a further 9 per cent. But-like-for like sales rose 4 per cent, with Britain performing slightly ahead of that. France, however, is now suffering the effects of the recession and like-for-like sales dipped slightly, as they did in the US where the group is still struggling to recover from the aftermath of break- neck expansion in the late 1980s.

Nigel McGinley, chief executive, said the US operation made a loss in the first half and, because of the importance of Christmas trading, it is too early to say whether it will be profitable for the year as a whole.

The group opened 10 new stores in the first half, most of them in Britain and Europe, bringing the total to 282, about half of which are here. A further 22 will be opened in the second half which, together with investment in scanning, means that capital spending will have doubled to pounds 3m.

Earnings per share were 1.05p (0.38p) but there is again no interim. Mr Bishko said that reflects the seasonal nature of the business, but he said the group intends to pursue a progressive policy in setting the final payout.

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