What Everyone Wants sounds third warning

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The Independent Online
What Everyone Wants, the discount retailer dubbed "What Nobody Wants" by its critics, issued its third profits warning in as many months yesterday, forcing the shares to an all-time low.

The shares fell 2.5p to 7p after the company said poor trading conditions meant that pre-exceptional losses would be in excess of pounds 4m "subject to the finalisation of year-end stock provisions". The company's last warning at the end of May had predicted a loss of pounds 2m while the warning in April had forecast a break-even position.

Yesterday, WEW said trading in June had been below expectations. It has earmarked eight stores for closure by the end of August which will result in a charge of pounds 2.8m against the accounts.

Though the group is trading within its banking limits it has appointed Coopers & Lybrand to advise the board on the options for the business. These include the seeking of offers for the company. However, WEW said yesterday that no formal offer had been received.

A central problem for WEW has been poor trading at its older, unconverted stores which form the bulk of its 80-strong portfolio.

Only nine have been converted to a brighter new "quality for value" format. And though these are said to be trading well, the long tail of older stores continues to act as a drag on performance.

In the new stores the average transaction value is 20 per cent higher than in the unconverted outlets. They also stock more upmarket ranges in shops branded as "The Store" with the What Everyone Wants logo displayed less prominently.

But with the company strapped for cash it now has insufficient funds to roll out the conversion programme in the way planned. The company had hoped to have 20 of the new-look stores by the end of the year, though this will now be reviewed.

Last month Richard Boland, WEW's chief executive, sold half his shareholding in the company after the company's end-of-May profits warning. He sold 80,000 shares at 14p to raise pounds 11,200. He said he had sold the shares to pay a tax bill.

It was Mr Boland, who joined the company from Sears, who initiated The Store concept. He has been joined by James Millar, the former William Low chairman, who is the WEW chairman. WEW was previously run by the entrepreneur Philip Green.

The company's shares have had a torrid time recently. In late October they were trading as high as 19.6p.

But they have been sliding ever since and yesterday's fall values the company at little more than pounds 10m.