Mulberry sheds 22%, JD Sports weighted by BlacksFriday, 15 June 2012
Mulberry stock, which before Thursday had increased in
value by 35% this year, shed 22% in early trading after posting annual profits lower than expected. Meanwhile, JD Sports has warned the Blacks Leisure rescue will cost it up to £15m in this financial year.
While Mulberry’s annual profits fell short of expectations by more than £1m and a 38% growth in revenues for the year to 31 March, British sports retailer JD Sports said Blacks, which it bought for £20m in January, could suffer £10m operating losses and up to £5m of restructuring charges as it bids to revive the business.
Seymour Pierce retail analyst Freddie George warned it is unlikely that Blacks can return to profit in the medium term, not until 2015 at the earliest. JD said its immediate priority was to “significantly improve” the appeal of the chain to customers. Like-for-like sales were up 1.5% in the 19 weeks to June 9, which represents a rise of around 1.8% over the past 10 weeks and comes despite poor weather.
Finally, the outgoing chief executive of Esprit Holdings wanted to reassure investors on Thursday that his family was the only reason behind his point-blank resignation from the retailer and that a crucial turnaround plan would go ahead as planned. Chief Executive Officer Ronald van de Vis said in an evening conference call that the timing of the double resignation had been "unfortunate" but his case was unrelated to that of Chairman Hans Joachim Korber, who quit on Wednesday.
"I have to be realistic. On those circumstances I cannot continue the way I have been working. I have been neglecting my family situation too much," de Vis said firmly after announcing on Tuesday that he would leave the company on July 1, 2013. In the same vein, Korber said he also had resigned with immediate effect for personal reasons.