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Fads' owner posts £145,000 loss after tough year

Published: 2 September 2008
Strategic Retail hit by market downturn; pulls plug on new store openings.
Fads' owner posts £145,000 loss after tough year
Strategic Retail is counting the cost of the consumer slowdown as it reported a £145,000 loss in its year-end results to March 1, 2008.

The owners of home decorating products, home textile products and furniture retailers Fads, Leveys, Texstyle World, and Furniture Express attributed the loss to pressure on homeowners' disposable income and loss making stores.

Revenues for the group fell from £22m to £20m.

It added it had reduced the number of store openings as it grapples with the weak trading environment.

"The Fads store locations, which have nationwide coverage, have been carefully reduced to eliminate loss makers or to achieve premiums where appropriate," Strategic Retail's chairman Ian Currie said in a statement.

Fads – now operating from 32 stores, down from 55 – saw revenues fall more than £2m year-on-year.

Openings for the Texstyle World business have been put on hold, despite it reporting like-for-like growth at stores in East Kilbride and Sheffield.

"We feel it is not presently appropriate to launch new stores, with their obvious drain on working capital, whilst the economy is so close to recession, " Ian Currie added. "We will carefully monitor market conditions before pursuing further opportunities."

The Furniture Express store in Carlisle performed poorly and the results showed a £90,000 write off of goodwill.

Despite the gloom, Strategic Retail did have a star performer: North-East based Leveys showed strong sales growth, although poorer performing stores were disposed of last year.

Average revenue last year was circa £270,000 per store versus £316,000 this year. An operating profit of £260,000 was described as 'quite pleasing'.

Average revenue per store for Fads was up from £238,000 last year to £253,000 this year. Operating profit improved from a reduction in number of stores in the portfolio to accommodate better performing ones.

Texstyle World achieved growth in overall turnover year-on-year. On a like for like basis, this growth amounted to circa 2.5%. The new store at Manchester showed strong performance in the period under review and with this model in mind Strategic Retail embarked upon further store acquisitions.

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