Findel on target for £25m in savings

The Burley-in-Wharfedale company said like-for-like sales fell three per cent in the 39 weeks to the start of January.

Underlying sales in its home shopping arm were flat. The group saw strong demand for its expanded casual and fashion clothing range which has been extended into tracksuits and sportswear.

But revenues from the financial services arm fell 10 per cent on last year after a decision to tighten credit requirements and focus on customers with good credit ratings. The group is keen to reduce bad debts over the coming months.

Sales at Kitbag remained strong at over 35 per cent ahead of last year. Kitbag, which is Europe's leading online sports retailer, operates official online stores for Manchester United, Chelsea, Real Madrid, Barcelona, Everton, the English FA, British Lions, Formula 1, Wimbledon and the Ryder Cup.

But Findel said that trading conditions at its other brands Confetti and I Want One Of Those.com remain challenging.

Findel's education supplies arm struggled with sales down 12 per cent, hit by falling export and project sales. Since the start of the month, Findel added school closures due to the snow storms have affected sales with over 8,000 schools closed across the UK.

The education division has suffered as teachers are being asked to keep some of their budgets back for the following year and the uncertainty caused by the General Election has also led to reduced spending.

The group said in the light of this performance, it continues to cut costs in this division, and has already made 6m annual savings.

"We have also put in place several key sales initiatives which we believe will return the division to like-for-like revenue growth by the second half of the next financial year," said chairman Keith Chapman.

The group said its primary objective is to generate cash and it remains on track to achieve its debt reduction target for the year to April 2.

The cost reduction programme has achieved 15m of annualised savings to date and a further 10m has already been identified. Findel has been through a tough time as the recession hit its core home shopping business.

But it hopes to reduce borrowings by 165m over the next three years, a considerable improvement on the previous 100m target. There are no plans for any more job losses.

Following a refinancing, the Kitbag home shopping business is no longer up for sale.

Last month Findel said it was parting company with chief executive Patrick Jolly, who will leave the group at the end of March.

Findel described the split as "very amicable".

The company said that Mr Jolly's skills were suited to Findel when it was expanding, but now it is being run for cash and to reduce debt it was a natural time for him to leave.

Mr Jolly has been replaced by chief operating officer Philip Maudsley, who has been with the group for over 20 years.