Warning socks Phipps shares

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The Independent Online
The disastrous run of trading at shoe manufacturer Chamberlain Phipps continued yesterday when the company issued its second profits warning in six months.

The shares lost a third of their value when the company said that difficult trading conditions and pounds 3m of re-organisation costs would push the group into the red in the year to March. The company is also passing the final dividend.

The shares slumped 23p to 42p compared with the 165p issue price when the company returned to the stock market in August 1994 after several years under the ownership of Evode.

The company said trading in the final months of the financial year had been "disappointing". Difficult conditions in the group's important markets such as the UK and France had affected the level of orders from mass retailers resulting in a shortfall in sales and margins.

Chamberlain Phipps makes shoe materials in the UK which it supplies to companies such as British Shoe Corporation and Marks & Spencer. It also manufactures shoes in France and workwear boots in the US.

It has been hit be weak demand and rising raw material prices. Though the re-organisation had already been planned it will be accelerated. The materials division based in Leicestershire will be sold.

The company made profits of pounds 13.2m last year boosted by acquisitions and expansion into the US. But the shares collapsed in October when the company highlighted "soft" market conditions and uneven demand.