Jessops to post loss as sales woes continue over summer

Click to follow
The Independent Online

The ailing camera retailer Jessops has revealed ongoing falling sales over the past three months, but said that protracted talks with its bank towards a "solvent solution" for the business continue.

Jessops, which has net debts of £61.7m, said it expects to post a pre-tax loss this financial year.

The retailer has been in talks with HSBC, which holds warrants over 15 per cent of its shares, since January and one of the options being considered is a debt-for-equity swap.

The 211-store retailer yesterday said: "The group continues to engage with its advisers and its bankers HSBC Bank to put the business on a more stable footing for the future, including discussions on a fundamental restructuring of its debt." Jessops also reaffirmed previous comments that shareholders are likely to be wiped out because of its high debt.

The loss-making camera specialist, which has been struggling since early 2007, is suffering from falling sales, the burden of its debt mountain and the migration of high street camera sales on to the internet.

Jessops delivered like-for-like sales down by 4.7 per cent for the 12 weeks to 16 August. The retailer cited "the background of the continuing difficult retail environment". This performance is in line with the 3.6 per cent fall in underlying sales for the 8 weeks to 24 May and the 4.5 per cent drop in the six months to 31 March 2009.

Jessops said that given the "ongoing discussions to put the business on a more stable footing for the future", it had decided to change the retailer's year end from 30 September to 30 November. For the six months to 31 March, Jessops' pre-tax losses widened to £13m, from £11.2m the year before.

In May, David Adams, the executive chairman of Jessops, said: "I am confident there is a future for the business. We are saddled with the decisions of the past. There was a rush for space [between 2004 and 2007] and the business got a bit dizzy and expanded too quickly without the proper infrastructure and incurred too much debt."

In its interim results in May, Jessop's auditors issued an emphasis of matter warning casting doubt on its ability to continue as a going concern.

Comments