LONDON (Alliance News) - Department store company Beale PLC, which is being acquired by English Rose Enterprises Ltd, said its loss slightly narrowed in its last financial year and it improved its gross margin, although sales were hit by planned stores closures.
The company reported a pretax loss of GBP4.6 million for the financial year ended November 1, 2014, slightly smaller than the GBP4.1 million loss it posted the year before. Its gross margin improved to 53.3% from 52.1%, on the back of better sourcing and buying, less promotional markdowns, better stock control as well as an improved brand and product mix.
Gross sales, which included concession sales and VAT, fell 3.6% to GBP116.2 million, which it said was due to store closures, the planned exit from its loss making TV/Audio product category alongside less promotional activity, which kept shoppers away. Like-for-like gross sales, excluding the store closures, were down 1.1%. Revenue from continuing operations fell to GBP63.8 million from GBP64.1 million.
"Much was achieved during 2014 towards our strategic objectives in the turnaround of the Beales business, and since the period end, trading has continued to improve further following actions taken to revitalise the business. A quarter-on-quarter improvement in like-for-like sales through 2014, an improvement in gross margin, a material reduction in the operating losses and continued improvement in the operational management of the business, are all indicators that the business is responding positively to the actions taken." said Chief Executive Michael Hitchcock in a statement.
Beale said like-for-like gross sales were up 1.7% in the first 16 weeks of the current financial year.
Last month, Beale and English rose announced that they had reached agreement on a discounted cash offer for Beale which values the department store company at GBP1.2 million, a culmination of a long-running battle with shareholder Andrew Perloff, who is behind English Rose. Under the terms of the deal, Beale shareholders will get 6 pence per share in cash.
Beale said the offer means it has the required growth capital for investment in its store estate and helps confirm the long-term viability of the company.
"The business is stronger as a result, with options to move forward now with a far greater degree of confidence having secured a bid for the business which comes with up to GBP2 million of capital growth funding," said Hitchcock.
Beale shares were untraded Friday morning. The stock was last quoted at 6.00 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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