Abbeycrest rings changes as profits fall

JEWELLERY group Abbeycrest said high gold prices and tough competition have forced it to slash its cost base, resulting in significant exceptional costs.

The Leeds-based group last month issued a profits warning and said it had breached covenants with its senior lender Burdale Financial.

Today the group said after slashing costs in its brands division and changing systems, controls and management at wedding ring brand Brown & Newirth's, key performance levels are now back in line with expectation.

Abbeycrest has appointed a new creative director, Julie Large, to drive the division's performance.

"Together with the strengthening of Brown & Newirth's management team and the changes made to the company's systems and controls, the board believes that the division's trading performance is now well placed to return to previous levels," it said.

Abbeycrest added its mass market Essentials division, which sells to retailers including Argos and Asda, "continues to adapt to the challenges posed by changing market conditions and precious metal prices".

It recently established a central management structure with responsibility for all operating segments in Essentials. The group said this is improving cooperation between manufacturing and sourcing and promoting a "more coordinated approach" to design and customer account management.

Abbeycrest added Burdale remains supportive. "The board is continuing in its discussions with Burdale to re-set the covenants and further updates on the group's progress will be provided in due course," it said.

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