RETAILING
THE list of well-known brand names at Sears, which recently sold 245
Freeman Hardy Willis, Trueform and Manfield shoe shops to entrepreneur
Stephen Hinchcliffe's retail group Facia, is extensive.
So is the group's capacity for disappointing the market. And the
half-year figures yesterday were no exception, leaving the share price
7[1/2]p lower at 108[1/2]p after a slump in profits and a warning about
second-half prospects, the second profit warning in three months.
Chairman Sir Bob Reid, a former chairman of British Rail, said the
company had a disappointing six months with trading profits falling 27%
to #30.3m, which included a #2.3m first-time acquisition contribution.
Footwear and sports and leisurewear suffered from the increased cost of
clearing surplus goods as well as of restructuring.
Freemans, Selfridges, Adams, Wallis, Richards and Warehouse are
described as having ''performed well'' in a depressed retail market.
However, Selfridges, the High Street flagship, managed an 11.3% sales
increase with profits up 20.9% to #11m.
Like-for-like sales in footwear did increase by 2.6% but profits
slumped from #10.9m to just #2m on sales of #286.8m.
However, Sears, led by chief executive Liam Strong, said its new
formats -- Shoe City, Shoe Express and Hush Puppies -- continued to
achieve good results despite a lower level of consumer activity. The
newest format, Shoe Connection, which is targeted at the middle market,
is ''performing well''.
Looking to the second half, though, the picture becomes really dismal.
Businesses are not doing as well in terms of sales as in the first half,
limited as that was in most cases. In August like-for-like sales dived
by 10% and are currently running 6% lower. ''In light of that, we remain
cautious about second-half profits,'' said the chairman.
Analysts yesterday were busy cutting their full-year projections for
the group. Sears itself is confident it is well placed to take advantage
of any improvement in consumer spend that may come through in the last
quarter of the year.
FACT FILE
1995-19961994-1995Turnover#1062.9m#949.6mPre-tax
profit#29.9m#53.8mEPS1.4p2.6pDividend1.05p1.05p
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