Alexon Group, a ladies clothing retailer listed on the London Stock Exchange, has announced like-for-like sales down 5.4 pct for the 19 weeks ended 12 June 2010 due to volcano ash disrupting supply chains.
The company which runs and maintains six brands in over 990 outlets across the UK said that transport distribution for its "size 16 to 32" brand Ann Harvey was held up in six or seven days of disruption delaying a key summer stock package.
Elsewhere at the group, online sales were up after some of the group's products were added to online stores for John Lewis, Debenhams and House of Fraser.
Eastex performance - another brand at the group aimed at 'sophisticated and elegant women' - appeared to be affected by the General Election and Alex & Co yet another brand -underperformed and plans a relaunch with new lines this Autumn/Winter season.
Freddie George, analyst at Seymour Pierce, offers this comment:
"Group LFLs for the 19 weeks ended 12 June declined by 5.4%, which disappointingly confirms that the LFLs have deteriorated in recent weeks. LFLs were reported to be down by 4% in the eleven weeks to 17 April. Management put the worsening trend down to shipments on Ann Harvey being delayed by the volcanic ash cloud and a significant deterioration in performance at Eastex. Gross margins were reported to be slightly down because of increased promotional activity. We are for the time being keeping our Hold recommendation although there is only limited headroom on the debt; there are still issues with several of the brands and the company is under pressure to perform better in the department stores.
"On our forecasts the company is expected to make a small profit in 2010/11 of £1m and £4m in the following year giving EPS of 0.8p and 2.7p in those years. We still prefer Jacques Vert (Buy), which is more lowly valued, has successfully completed its restructuring programme and is set to rebuild earnings further from a solid base."