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Profits flat at Fortnum as overseas visitors spend less

Fortnum & Mason (above), grocer to the well-heeled, yesterday announced a tiny pounds 6,000 increase in annual profits to pounds 3.23m for the year to 12 July. Garry Weston, chairman, said trading was affected by a fall in the number of overseas visitors and by reduced trading space on four floors at the store in Piccadilly, London.

He said difficulties were encountered during the complex underpinning and foundation stages of the building of the store extension, and the programme had been delayed. "This means we will not be able to trade the full extended ground floor this Christmas," he warned.

Mr Weston said the group's budgets, which were currently being met, called for an increase in underlying profit, but as they were based on the assumption that the UK economy remained buoyant during the Christmas trading period, and that the pound did not continue to strengthen, it was too early to estimate the outcome.

In the year under review, departments such as wines, hampers and cakes achieved growth above 10 per cent as sales to local customers remained buoyant throughout the year. Menswear and ladies fashions also benefited from this buoyant trade.

However, Mr Weston said spending by overseas visitors fell by an estimated 20 per cent in the second half compared with the strong performance in the comparable period of 1996. As a result of the building work food hall selling space has been reduced by nearly 10 per cent since April.

Despite the flat profits performance, the dividend is being increased from 7.6p to 8.3p.