The futuristic appeal of Birmingham's Bullring shopping centre proved more competition than James Beattie, the Midlands-based department stores group, could handle last year.
Not even a revamped flagship store in the city centre could tempt shoppers to check out Beatties, instead of Selfridges' iconic space-age bubble which, along with Debenhams, anchors the new shopping mall.
Chris Jones, Beatties' chairman and managing director, blamed the 2 million square feet of selling space that had been added to the West Midlands retail scene since it opened its refurbished store in 2001.
The "Bullring effect", which rival House of Fraser highlighted when it reported results last month, meant losses at Beatties' flagship Birmingham store spiralled to £1.6m last year, while turnover was £10m lower. The group spent £7.5m refitting the former C&A site.
Beatties, which has most of its selling space in the Midlands, said pre-tax profits plunged 26 per cent to £5.2m in the year to end January. Its sales were hit by its decision not to join in the "discounting panic" that swept the high street in the run-up to Christmas, which meant its gross margin was maintained, it said.
Mr Jones, who is planning to split his controversial dual role, yesterday ordered an overhaul of "all aspects of the business ... to improve sales whilst conserving costs". He said the review would focus on improving the group's ranges of merchandise and reducing stock. In line with rival retailers, he plans to include more contemporary ladies' clothing ranges to appeal to today's fashion-conscious older woman. The amount of own-brand clothes would be increased to counter the effect of falling prices of most major menswear brands, he added.
Striking a glum note, Mr Jones said: "The tough retail environment continues. The overall trading environment is hostile, competition intense and the effects of price deflation mean that profitable revenue growth is difficult to achieve."
Beatties' underlying sales fell by 4.2 per cent during February and March, although a successful new store in Telford, well away from the competition of Birmingham, meant total sales rose by 1.2 per cent. The group said it planned to build on the success of its Telford and Huddersfield sites by seeking new opportunities to expand its 12-store strong estate.
David Stoddard, an analyst at Teather & Greenwood, said: "The going is tough and Beatties will struggle to make any progress this year." Richard Ratner, at Seymour Pierce, said the group could make a "tasty morsel" for a prospective buyer, but added that the most obvious candidate - Allders - "seemed to be struggling itself".Reuse content