Freezing weather knocks profits at Alexon

The owner of brands including Ann Harvey, Dash and Kaliko said the winter freeze saw like-for-like sales plummet 19.9 per cent in the three weeks to December 18.

Luton-based Alexon, which also owns Minuet, added that the weather was having a disproportionate effect on the group as it largely serves the older market.

Between 40 and 60 of its outlets – including concessions in retail stores – closed due to the snow in each of the last three weeks, although online sales jumped 129 per cent in the period to mitigate some of the high street pressure.

Shares in the retail sector have fallen sharply in recent days amid fears over the loss of sales in one of the most important trading weeks of the year.

In Alexon's case, the recent decline left sales so far this year down 4.7 per cent and will impact profits in the year to January 29 by up to 1.5m.

Investec Securities revised its forecast for the year to 1.3m from 2.8m.

Alexon added it was in talks with its lender as the performance threatened a potential technical breach of one of its banking covenants.

Alexon said: "The group's customer base for its largest brands is predominantly an older demographic and as such, severe weather such as the recent snow and freezing temperatures, has a disproportionate effect on sales.

"Furthermore, given our regional distribution model and the particularly severe weather in certain parts of the UK, a number of stores have been forced to close for several days."

The group said its bank had been informed of the recent trading woes and was "constructive and supportive" in negotiations over the possible covenant breach.

Alexon has 63 UK stores and around 1,100 concessions and standalone stores across Europe.