Alexon, the womenswear retailer behind the Alex, Dash, Ann Harvey and Bay Trading outlets, has become the latest company to add to the high street gloom after warning that profits would slide this year as sales continue to suffer.
A slew of retailers have warned on profits over the past few weeks as nervous consumers have held back on spending as a result of the credit crunch. Leading into the crucial Christmas sales period, a number of companies, including Signet, Moss Bros and Regent Inns, have had to pull back forecasts for revenue and profits growth.
Alexon warned in September that like-for-like sales had fallen 5 per cent, but said yesterday this trend had continued in the lead up to Christmas. Factoring in a further deterioration in trading over the past five weeks, the retailer said sales in the 18 weeks to December fell 7 per cent.
Despite its gross margins rising nearly 2 per cent, Alexon said pre-tax profits for the year would be between 11.5m and 12.5m, well below expectations.
There was a further sting in the tail with the company warning that 2008 is likely to be as challenging as this year, although it said it remained confident that actions taken to strengthen its brands put it "in good stead for the future".
Ramona Tipnis, at Numis Securities, said the latest warning was worse than had been feared. The analyst said given that trading conditions appear to be deteriorating, the final outcome at the end of January may be worse.
Shares in Alexon fell 11 per cent below the 100p level to 96.25p on the back of the warning.Reuse content