Womenswear sales slump

Alexon, which has six brands available in more than 990 outlets in the UK and Europe, said same-store sales fell 9% in the first three weeks of August and that it now expects its full-year profits to be “well below” expectations.

The board said it was considering selling the company as one of a number of options to restructure the struggling retailer and was in discussions with more than one interested buyer.

The bleak outlook came as a survey from accountancy firm BDO revealed the high street recorded its worst sales in two years in August as the riots that shook the UK took a heavy toll on the retail sector.

Luton-based Alexon, which is also reportedly considering a multi-million cash call to investors in a bid to reverse its fortunes, returned to profit in the year to January.

But the company has struggled in the current financial year, with like-for-like sales in the first six months increasing 0.7%, although total sales dropped 8% as it slowed its store opening programme to conserve cash.

The group, which also owns the Dash and Minuet Petite chains, rolled out a tough turnaround plan last year which involved raising £20 million through shareholders and shutting 51 stores.

The board, responding to speculation over the weekend, said it was exploring options for a “more appropriate” capital structure and a sale was an option under review.

However, it added no firm proposal had been received and there was no guarantee of a deal.

Looking ahead, Alexon said the downward trend in August did improve slightly, slowing to a 1% drop in like-for-like sales in the last week of the month.

But it warned the environment and outlook remains “very tough”.

Elsewhere, Alexon reported strong growth in its online division, which was up 118% in the first half of the year, although it makes up 8% of the business.

Refitted stores and concessions continue to outperform the rest of the estate, Alexon said.