Turnaround strategy paying off for Beales (From Daily Echo)

Turnaround strategy paying off for Beales

12:23pm Tuesday 30th June 2009 in

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SOUTH coast-based department store chain Beales reported a slowing in sales declines and said action to turn the business around was starting to pay off.

The group, which has an anchor store in Winchester’s Brooks Centre, said sales for the most recent 15 weeks dropped by 1.6 per cent in a marked improvement on the 3.3 per cent decline seen in the previous 11 weeks and 7.8 per cent plunge at the full-year stage.

But half-year pre-tax profits fell 38 per cent to £543,000 and Beales repeated warnings made earlier this year over a “material uncertainty” due to limited headroom in its banking covenants.

The Bournemouth-based firm confirmed it may have to renegotiate its banking agreements if economic conditions worsen and impact sales – a move that could threaten its ability to continue as a going concern.

Mike Killingley, chairman of Beales, told investors: “We are continuing to pursue an aggressive promotional strategy, growing our buying-in margins and focusing on cost control. When the economic environment improves, we are confident that the action being taken will enable us to restore the group to full year profitability.”

The firm is hoping a collaboration with retail veteran George Davies on his new GIVe fashion range will also reinvigorate sales.

Mr Davies – the man behind major labels Next, George at Asda and Marks & Spencer’s Per Una – will launch his new range across Beales on October 1.

It’s part of a turnaround strategy which includes fashion shows and a move to bring in concession brands after the collapse of a number of its partners into administration amid the recession, such as Principles, Royal Worcester and Viyella.