Out with the old stock sees Findel plunge into the red

Findel’s Kitbag division saw sales increase 15 per cent in the 26 weeks to September 30, but it made a £1.8m operating loss, compared to a £1.4m profit the previous year.

Its performance was hit after it cleared £300,000 of “obsolete” items such as outdated football strips.

Profits were squeezed by a number of under-performing contracts.

The division, which is due to start a new contract with Sunderland Football Club next year, said it is trying to renegotiate the contracts, but they are likely to continue to hit profitability in the second half.

Findel said current trading is flat despite recent promotions, adding that the division’s rapid growth had failed to translate into profitability.

Findel, which also owns door-to-door sales business Kleeneze and Express Gifts, said losses increased 81 per cent to £5.6m in the half-year, but claimed its three-year recovery plan is on track after “encouraging” recent trading.

Sales were broadly flat at £254.6m in the first half, but rose 2.9 per cent in the eight weeks to November 25.

At its biggest division, Express Gifts, sales were up 10.9 per cent, leaving the mail order firm on-track for a “very strong Christmas”.

Customer numbers at the division, which owns the Studio catalogue shopping, Ace homewares and Health & Home shopping website, increased 3.7 per cent ahead of its peak trading period after the division dropped its prices and absorbed VAT increases to drum up trade.

Findel is also the biggest supplier of educational supplies to schools and colleges in the UK.