Game and Thorntons hit sweet spot to boost retailers
Thursday 23 April 2009
The video game specialist Game Group posted record full-year profits yesterday, while the chocolatier Thorntons also revealed tasty third-quarter figures, providing further evidence that the retail sector's darkest days may just have passed.
Game, which operates 1,342 Game and Gamestation stores in 10 countries, posted a 75 per cent uplift in pre-tax profits to £119.6m for the 53 weeks to 31 January 2009, helped by purchasing efficiencies from its completed acquisition of Gamestation last year.
Game's total sales soared by 32.2 per cent to £1.97bn, as growing numbers of families, women and over-35s flocked to buy software games, including Wii-fit and Grand Theft Auto IV. Lisa Morgan, the chief executive of Game Group, said the collapse of the entertainment retailer Zavvi and Woolworths had also presented growth opportunities.
Game's underlying sales fell by 6.3 per cent for the 11 weeks to 18 April, a better performance than City analysts had feared, given that it was up against strong comparable sales last year. It also revealed its gross margins improved by 150 basis points over the 11-week period, driven by a larger proportion of higher-margin software products in the sales mix.
Meanwhile, the chocolate retailer Thorntons revealed its own-store sales grew by 3.9 per cent to £35.3m, driven by strong like-for-like sales up by 3.3 per cent for the 14 weeks to 18 April, compared with a fall of 6.3 per cent in the previous quarter. The retailer's total sales, including its franchise, multi-channel and commercial units, grew by 11.7 per cent to £58.6m. Thorntons said its full-year pre-tax profits would not be less than £5m.
The strong reports from the two follow upbeat figures from high-street names such as Primark and Burberry, while total sector sales have also held up.
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