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Jessops has warned investors that its key summer period has not materialised as the credit crunch hits, and customers look to save money on luxuries such holidays and other products associated with them – including new cameras.
Speaking to the City this morning, Jessops warned that: "Trading from May 29th has not improved going into the key summer period as anticipated based on prior years experience. Therefore, like-for-like sales in the 41 weeks ended July 13th are down 5.7 per cent, with the last three week trending at an average of 11 per cent down."
The firm had reported that sales were down by five per cent in its interim report for the six months ended March 30th, adding that sales were down by eight per cent for the eight weeks ended May 25th.
However, the firm is still confident that it can deliver a better profit than last year, despite the fall in sales. "The actions we have taken throughout the course of this year have resulted in a gross margin increase of over 200 basis points, significantly decreased overheads and stock levels," said executive chairman, David Adams.
"The retail environment has worsened significantly over the last few weeks but the strategy the Board is implementing means that we still expect to deliver an EBITDA (Earnings before interest, taxes, depreciation and amortisation) that is higher than last year."
It follows research from Legal and General that claimed as many as 26 per cent of those questioned in a survey had cancelled holiday plans this year because of the current economic situation.
Source: Retail Bulletin
