Sir Terence Conran's design-to-food empire is being kept afloat by his burgeoning restaurant chain as homeowners shun his exclusive furniture shops.
Conran Holdings admitted yesterday it had been forced to close two of its loss-making shops to try to stem the losses from its eight remaining Conran Shops. It has shut sites in London's Conduit Street and on Paris's Bd des Capucines, taking a massive writedown in the process.
"Our shop group and our restaurant in New York are still finding things tough," the group said. The company has called on David Emil and Michael Lomonaco, the former owners of the Windows of the World restaurant at the top of the Twin Towers, to help rescue the fortunes of Guastavino's.
The privately owned company, which is chaired by Sir Terence, revealed that its pre-tax profits for the year to March 2004 tumbled to £1.2m from £1.9m the previous year.
Profits were hit by the cost of opening several new restaurants, including Plateau at Canary Wharf and Etain in Glasgow. On top of the group's losses from its Conran Shops, it also racked up "substantial costs" as part of a revamp of the group's retail operations, which included investment in new systems. Turnover slipped 4 per cent to £110m, but the decline was because of the one-off boost from selling goods to a new Tokyo store the year before.
The closure of two Conran Shops leaves the group with three stores in London, three in Japan, one in Paris and one in New York. Along with the likes of Marks & Spencer, the group has missed out on the recent boom in home furnishings sales, leaving retailers at the cheaper end of the market, such as Ikea, to prosper.
The one bright spot in yesterday's figures was the company's restaurant chain, which spans 35 sites from London to Edinburgh in the UK, and Stockholm to Paris on the Continent. Profits before pre-opening costs rose 18 per cent to £4.6m, and 11 per cent to £4.1m on a pre-tax basis.
Des Gunewardena, the chief executive, said: "Despite a disappointing summer weather-wise, 2004 has also been pretty good." Underlying sales at the restaurant chain shot 7 per cent higher over Christmas.