Retail earnings dive at Burton: Group blames losses on disruptive changes

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The Independent Online
A PLUNGE into loss at Top Shop, increased losses at Principles and falling sales at another two of its chains contributed to a sharp fall in retail profits at Burton Group at the halfway stage.

The group blamed the losses on the disruption caused by its recovery programme. At Top Shop it introduced more fashionable merchandise and aimed at younger customers. But the increase in sales in that market failed to compensate for the decline in old customers, which pushed the group into a pounds 7.3m loss, from a pounds 1.8m profit last time.

At Principles a similar problem was caused by moving too far upmarket and offering too narrow a range, trebling losses to pounds 8.8m. Burton has now reversed these strategies and said sales in the last 11 weeks were up by 8.5 per cent at Top Shop and 6.3 per cent at Principles, excluding shop closures.

Group profits were pounds 36m on sales of pounds 1bn. That compares with pounds 24.7m last time, but that was after an pounds 11.9m exceptional reorganisation charge - excluding that, profits dipped by pounds 600,000.

The results were helped by a halving of interest charges to pounds 8.2m. Retail operating profits fell pounds 15m to pounds 39.7m.

Earnings per share were 1.9p, up from 1.4p last time, and the interim dividend was held at 1p. The shares rose 2.5p to 56.5p.

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