Whittard issues profit warning as high street sales are hit

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The Independent Online

Whittard of Chelsea, the specialist tea and coffee retailer, warned yesterday that pre-tax profits this year would be lower than expected.

Whittard of Chelsea, the specialist tea and coffee retailer, warned yesterday that pre-tax profits this year would be lower than expected.

The company blamed the fall in profits on weak consumer spending during the last two months, which saw a 4 per cent fall in like-for-like sales during the Easter period compared with a 14 per cent rise during the same period last year.

Whittard's chairman, Richard Rose, said: "Last year was particularly strong, with like-for-like sales growing by 17 per cent, and it was always going to be hard for us to match that. We don't feel that anything has gone wrong as the whole of the high street is struggling at the moment and we have not been able to buck the trend."

Rob Brent, an analyst with KBC Securities, lowered his forecast for Whittard's pre-tax profit from £3.7m to £2.4m. He said: "Whittard have been carrying additional stock because of a weak trading period over Christmas and a tough retail environment in general. It has grown phenomenally over the last few years, and this period will provide them with some time to consolidate and take stock in order to move forward."

Whittard has more than 120 stores nationwide and had previously experienced a revival in its fortunes under Mr Rose, who was appointed in 2001 after the company had endured two years of losses. Despite this latest profit warning, he said the group would be continuing its expansion policy of opening 10 new stores a year in the UK as well as introducing a new range of tea brands and ceramic gifts.

"We do not expect the severe downturn that the high street has been experiencing since February to last forever, and we are very well placed to take advantage when it stabilises," Mr Rose said.

The company also said that overseas trade was progressing well. Overseas sales make up about 5 per cent of Whittard's revenues, and the company is planning to expand its business in the US.

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