Rights issue to rescue Alexon

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THE NEW management at the struggling clothes group Alexon yesterday called a pounds 16.4m rescue rights issue and unveiled a replacement for its dismally performing Dash division - a new line of clothing aimed at outsize women, writes Topaz Amoore.

John Osborn, the new chief executive, said Dash's 80 free-standing shops selling leisure wear were still haemorrhaging cash despite a pounds 1m relaunch and would now be converted to sell the new Ann Harvey range of 16-plus sized clothes; 170 concessions will continue to sell Dash goods.

Alexon reported pre-tax losses of pounds 12.2m in the 53 weeks to the end of January 1993, against profits of pounds 11.3m the previous year. There was no final dividend but the interim dividend was 3p.

The proceeds of the four-for-five rights issue, underwritten by Kleinwort Benson at 60p a share, will help cover an pounds 11.2m provision, principally for chronic overstocking.

A further pounds 4m worth of exceptional costs includes pounds 800,000 in payments to the former chairman and joint chief operating officers ousted by institutional investors in April.

Yesterday the shares closed at 65p, down from 78p.