Bonmarche issues another profit warning

Clothing retailer Bonmarche has warned on its profits after it saw “significantly weaker” trading since the beginning of March.

The retailer said its performance reversed sales gained in previous months and said if this continued for the rest of the month, it expected its underlying profit before tax to record a loss of greater than £4m. It now believes its profit before tax loss will fall between £5m-£6m.

This follows the company’s announcement on 13 December 2018, were it said its sales during the third quarter of the financial year were below initial expectations.

During the first two months of the year Bonmarche focused on clearing residual stock with heavy discounting, reducing stock levels by 40%.

Bonmarche said it believed the recent downturn in trading to be a consequence of “the demand for transitional ranges, between winter and spring, having been satisfied during January and February”.

Its statement said: “The group’s cash balance reaches its lowest point in the annual cycle at the end of March, when its bank facility is expected to be sufficient to meet liquidity requirements, even at the lowest end of the PBT range. Other than this short term borrowing requirement at the year end, the group expects to continue to operate with a positive net cash balance during FY20.”