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The uncertainty facing the UK high street is unlikely to go away any time soon, according to the chief executive of Bonmarché, who warned about difficult recent trading even as the company reported a more than doubling in first-half profits.
The value fashion chain, which is in the middle of a major restructuring drive to modernise its business, reported revenues of £97.8m for the 26 weeks to September 30, 5 per cent higher than the same period last year. Pre-tax profit rose from £2m to £4.2m, in line with the company’s expectations.
However, the company said “we continue to face uncertainty as to future market conditions, particularly in the near term”. Official figures released last week showed the first year on year decline in UK retail sales since 2013, while surveys by the British Retail Consortium and Confederation of British Industry have both pointed to a weak month of trading in October, particularly for non-food retailers.
Rising inflation combined with sluggish pay growth has led to an extended period of falling real wages in the UK, leading many economists to predict a slowdown in spending on non-essential items as households are forced to tighten their belts.
Bonmarché said “it has been widely reported that October was a difficult month for the clothing retail sector, and we were not immune from this”.
Helen Connolly, Bonmarché chief executive, said she was “satisfied” with the company’s turnround progress, but added:
We are only at the beginning of the journey in some areas of our strategy and there is a strong plan to support future growth. I do not expect the clothing market to become any less challenging in the near future, and therefore remain focussed on continuing to grow by profitably gaining market share.