16th Jan 2009 08:45
16 January 2009
Theo Fennell PLC
("Theo Fennell" or "the Group")
Operations Update
The Board of Theo Fennell PLC, the AIM listed jeweller, today announces an operations update.
Christmas Trading
The Group experienced mixed Christmas trading due to a very depressed UK consumer market. Sales at the Theo Fennell flagship and City stores were significantly down year on year whilst international sales were flat. However Group sales from Theo Fennell's department store outlets which have a strong international customer base were in-line with 2007 sales figures and in some cases ahead.
Retail sales in the five weeks for the month of December 2008 were 21% lower than 2007 on a like-for-like basis.
2009 Strategy
The Group expects UK trading to remain depressed in the immediate term and international trading to continue at satisfactory levels.
Following a series of negotiations with Harrods, both parties have decided not to renew Theo Fennell's contract to run the department store's luxury watch counters. Theo Fennell's successful jewellery counters will remain and a longer-term 3 year contract has been negotiated. The transfer of the Harrods watch business is expected to see an inflow to the Group of approximately £2 million cash by 31st March 2009. As a result of these changes, the Company is restructuring and downsizing, which will result in a significant reduction in overhead.
The focus for the rest of the year will be to concentrate on the Theo Fennell brand both in the UK and internationally. The Board continues to have confidence in the potential of the business with the brand competing comfortably against other major international brands. Internationally the Company will be giving priority to developing and expanding its franchise and concession network with existing trading partners in regions such as the Middle East, Russia and other former Soviet Union countries.
Financial
As a result of the decline in Christmas trading and continuing costs of downsizing the business, the Group will make a loss for the year ended 31 March 2009.
The reductions in overhead, the Harrods' transaction and other measures will significantly reduce the Company's borrowing requirements.
Given the restructuring referred to and the focus on the Theo Fennell brand, the Company anticipates an improved performance for the year ending 31st March 2010.
Third Party Investment
Talks with the third party interested in making a significant investment by investing through the subscription of new equity in the Company in order to fulfil expansion plans are ongoing and have resumed post the Christmas trading period. Whilst discussions are ongoing, there can be no guarantee that a transaction will be completed.
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Enquiries: |
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Theo Fennell Plc Richard Northcott |
Tel: 020 7591 5000 |
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Pelham PR James Henderson / Kate Catchpole |
Tel: 020 7743 6678 |
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Seymour Pierce Limited Mark Percy |
Tel: 020 7107 8000 |
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