Monsoon thunders ahead of rivals with surging sales

Monsoon put its rivals to shame yesterday by unveiling the strongest post-Christmas trading figures of any high street retailer.

Monsoon put its rivals to shame yesterday by unveiling the strongest post-Christmas trading figures of any high street retailer.

The extent of the group's outperformance sent its shares up 11 per cent to 269.5p barely 12 months after its chairman, Peter Simon, tried to take it private with a 136.5p-per-share tender offer. The company revealed its like-for-like sales growth had accelerated during its first half, soaring 13 per cent during the six weeks to 8 January. Its interim underlying sales grew 10 per cent.

Mr Simon, whose family controls 75.5 per cent of the company he founded in 1972, said he was "pleased" with the rate of growth. He added: "We are not complacent as we recognise we are trading in difficult environments."

Only New Look, the privately owned, budget fashion retailer, and Peacocks, the value clothing chain, have come close to Monsoon's figures, with underlying sales growth of 11.6 per cent and 9.5 per cent. Marks & Spencer issued a profits warning and even Next, the darling of retail analysts, shaved its internal profits forecast after it was left with too much stock going into its sale.

Monsoon's sales growth comes in spite of it having one of the least corporate-governance friendly boardrooms in the country.

Mr Simon's decision to move the company to AIM, the junior market, in 2003 enraged those institutional investors who were forced to sell up because they were limited to holding shares in companies listed on the main stock market.

Many also felt that at 136.5p a share, excluding the dividend, Mr Simon's tender offer undervalued the company. As a result, his attempt in October 2003 to acquire more than 90 per cent failed, although he did manage to break the 75 per cent threshold. Since then, the company has axed the dividend, despite having a cash pile of £53.7m. "We look forward to investing our money on long-term projects at the appropriate time without any pressure to do so," Mr Simon said, alluding to the control he wields over the group.

Monsoon also ignored calls to comply with the Combined Code, which recommends that companies have a majority of non-executive directors on their boards. The only non-executive director on the board is Anton Simon, Peter's brother, who represents the Stoneycroft family trust. Yesterday Mr Simon was able to point to the company's soaring sales growth to support his assertion that it is better to concentrate on running a company than worry about wooing the City.

Richard Ratner, an analyst at Seymour Pierce and veteran critic of Mr Simon's boardroom practices, said: "Actually, on the results he has produced it is difficult to argue from a financial view point about this!" He added that the City had to "learn to live with" Mr Simon's views. Nick Bubb, at Evolution Beeson Gregory, said the near-doubling in Monsoon's share price "will be a reminder to investors not to let other companies go private too cheaply". He said Monsoon's figures showed "what specialist fashion retailers can do when they get it right". Numis Securities, the company's broker, raised its pre-tax profits forecasts to £54.8m from £49.6m.

Monsoon, which owns the Accessorize chain, reported a 32 per cent jump in interim pre-tax profits to £27.5m. Operating profits from its international division, which expanded into Turkey, Holland and Sweden during the half, doubled to £3m. Monsoon said it intends to "significantly" expand its Russian estate, which it bought back from its franchise partner in November.

Separately, a survey showed that London's retailers fared worse than their national counterparts. The British Retail Consortium said underlying sales in the capital in December shed 2.5 per cent. That compared with a 0.4 per cent decrease in like-for-like sales across the country.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions