SHARES in over 50s fashion chain Bonmarche plunged nearly 30 per cent after it issued a profits warning and announced that respected chief executive Beth Butterwick is stepping down to take the top job at Karen Millen.
The Wakefield-based firm said trading conditions during December, particularly since Black Friday on November 27, have been “very challenging” and have failed to reach the level it would expect at this time of year.
It cut its annual pre-tax profit forecast to between £10.5m and £12m, down from analysts’ expectations of £13.4m.
In a trading update the group said: “The board’s view is that these trading conditions are likely to continue for the remainder of the winter season and it has therefore revised its profit expectations for the current financial year. Given the ongoing volatility of trading conditions, the board considers it likely that the pre-tax profit will be within the range of £10.5m to £12.0m.“
The group’s shares plunged 29 per cent to 210.5p, a fall of 87p.
The profits warning was compounded by the news that Ms Butterwick is to step down after four years with the company to join upmarket fashion chain Karen Millen as chief executive.
Bonmarche said Ms Butterwick will remain with the group until her successor is appointed to ensure a smooth transition.
The board said it is conducting a comprehensive search for the company’s next chief executive and a further announcement will be made in due course.
Analyst Kate Calvert at Investec said: “This is a disappointing update from Bonmarche, coming just three weeks after its first half results. Trading remains challenging and has not normalised as previously hoped.
“Beth Butterwick is leaving to join Karen Millen as CEO after four years at Bonmarche. She will stay on until a new person is appointed, but her departure is disappointing as she led the business recovery post administration.”
Chairman John Coleman said: “We thank Beth for her exceptional contribution over the past four years.
“She has led the business through a transformative period, through the acquisition by an affiliate of Sun Capital Partners in 2012, the IPO on AIM in 2013, and most recently the company’s transition to the London Stock Exchange’s main market as one of the UK’s largest women’s value retailers.
“Beth has imbued Bonmarche with a sense of energy and purpose, and today the business is well-placed for long-term success, with a robust balance sheet, strong management, and a carefully formulated growth strategy. We wish her all the very best for the future.”
Ms Butterwick said: “It has been a great privilege to lead this unique company. I would like to offer my sincere thanks for the valued support from customers, colleagues, suppliers and shareholders, throughout my time with Bonmarche.”
Bonmarche will issue its post-Christmas trading update on January 15.
Karen Millen has flagship stores in London and New York.
Page 3: Christmas retail winners and losers
Beth Butterwick is credited with transforming Bonmarche from a company in administration to a popular over 50s fashion retailer.
Appointed in 2011, she led the company’s new business strategy which focused on providing mature women with fashionable clothing that was age appropriate.
Under Ms Butterwick, Bonmarche has become a lot less frumpy and far more on trend, catering for women who don’t want to bare too much flesh or try to look younger than their years.
Best sellers this season include the “coatigan”, a cross between a coat and a cardigan that allows shoppers to dress for the mild winter months.
The “coatigan” range has now sold out and other popular trends include capes and patterned trousers, which have been a big hit on the catwalk this year.
Bonmarche said its customers are refusing to adhere to old-fashioned views about how mature women should dress.
Ms Butterwick has championed clothes that flatter the figure and avoid fashion faux pas such as bare top arms, tight fitting waists and showing too much cleavage or leg.
She has over 21 years’ of retail experience, having started her career as a graduate trainee with Marks & Spencer, where she rose to head of buying for accessories. She then joined Gap as part of the senior management team responsible for European expansion.
Bonmarche was acquired by private equity firm Sun European Partners in January 2012 from administrators KPMG after its owner Peacocks, saddled with £240m of debt, went into administration.
Ms Butterwick joined Bonmarche as brand director.