Tie Rack in expansive mood

Tie Rack is notable for being almost the only niche retailer (remember those) to have survived the recession and the barely noticeable high street recovery since. Its revival is all the more remarkable in that its founder, Roy Bishko, who oversaw the over-expansion that nearly proved fatal in the early 1990s, remains at the helm.

Mr Bishko is now sufficiently confident of the group's health that he is once more talking about expansion. The group opened 38 shops in the six months to mid-August, more than the 35 brought on-stream in the whole of last year. That fed into a 20 per cent rise in profits to pounds 490,000 in the always slow 28 weeks to August, on a 14 per cent rise in turnover to pounds 41.6m.

The expansion has proved timely as a combination of hot weather and consumer reluctance to spend pegged underlying like-for-like sales at the same level as the first half of last year. Tie Rack intends to open a further 20 stores by the year end, adding a net 51 to last year's total of 329.

There is an element of profits drag as legal, training and other costs have to be borne on any move into new countries but, now in 25 countries, Tie Rack is rapidly establishing a world-wide presence.

With pounds 8.5m still in the bank after pounds 2.4m capital expenditure in the latest half, Tie Rack has no shortage of firepower to continue the process. Warm autumn weather is not helping scarf sales and the year's outcome still remains heavily dependent on Christmas. But if profits hit pounds 8.6m, the shares, up 4p to 154p, would stand on a prospective multiple of 14. Still reasonable value, although the 37 per cent holding of Vadep, the original Swiss backers, dampens any takeover prospects.