Pension reform could boost retailer

Beth Butterwick, chief executive of Bonmarche. Picture: Scott Merrylees
Beth Butterwick, chief executive of Bonmarche. Picture: Scott Merrylees
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Over-50s focused womenswear retailer Bonmarche posted a jump in annual profits today and said recent reforms to free up pension pots may boost sales.

The business said pre-tax profit before exceptional items lifted 10.4% to £12.4 million for the year to the end of March.

Strong summer sales were followed by a slower second half of the year amid mild weather - a period which left many retailers finding it hard to shift unwanted heavy winter coats and boots.

The firm, which employs just over 3,100 staff across 292 shops and concessions, said its full-year same store sales grew 4%, driven by its popular David Emanuel designer range and the introduction of a new menswear line. Shares lifted almost 6%.

Chief executive Beth Butterwick said she was “satisfied” with this year’s results.

She warned that the overall outlook for consumer spending and the clothing market “remains uncertain given the macroeconomic challenges which are still to be overcome”.

But she added that over the coming year pension reforms and a rise in real incomes “may have some positive impact” on the business.

In April the Government introduced changes that mean pensioners can access their pension pots without having to buy an annuity, which would provide a lifetime income.

Wakefield-based Bonmarche said it managed to raise average prices by 1.8% over the year.

It opened 29 new stores that contributed £8.3 million of additional sales to a business that saw overall revenues lift 8.7% to £178.6 million.

The group added that this year it planned to open five new stores and between 15 to 20 concessions.

It added said this year it wanted to grow its ranges of t-shirts, tops, trousers, lingerie and nightwear, as its offer had “previously been incomplete”.

Last summer it launched a range by designer Ann Harvey in 23 stores and online. It will follow this up with a plus sized range autumn/winter 2015 with, sizes ranging from 16 to 32.

It also plans to grow its menswear line, which has so far been rolled-out to 50 stores.

The group’s statutory full-year pre-tax profit showed a jump of 55% to £12.4 million, but this is primarily because it did not have to pay costs related to its November 2013 stock market flotation as it did last year. The business was founded in 1982.

Ms Butterwick said: “I am satisfied with the current year’s performance, in a year of contrasts between a strong performance in the first half, supported by good weather, versus a more challenging second half of the year.

Brokers at Investec added: “The full-year 2015 results highlight how far Bonmarche has come, with increased operational flexibility enabling it to deliver strong growth against a volatile and difficult trading backdrop.”