Womenswear retail group Alexon has revealed a £1.5 million hit to profits after the extreme weather closed stores and put off older shoppers.
The owner of brands including Ann Harvey, Dash and Kaliko said the winter freeze saw like-for-like sales plummet 19.9% in the three weeks to December 18.
Luton-based Alexon, which also owns Minuet, added that the weather was having a disproportionate effect on the group as it largely serves the older market.
Between 40 and 60 of its outlets – including concessions in retail stores – closed due to the snow in each of the last three weeks, although online sales jumped 129% in the period to mitigate some of the high street pressure.
Shares in the retail sector have fallen sharply in recent days amid fears over the loss of sales in one of the most important trading weeks of the year.
In Alexon’s case, the recent decline left sales so far this year down 4.7% and will impact profits in the year to January 29 by up to £1.5 million. Investec Securities revised its forecast for the year to £1.3 million from £2.8 million.
Alexon added it was in talks with its lender as the performance threatened a potential technical breach of one of its banking covenants.
The performance comes as a setback for Alexon as management strive to turn the business around following a difficult recession. The firm plunged into the red in 2009, after its Bay Trading subsidiary collapsed, taking £9 million in exceptional costs. It announced a £20 million fundraising in March under plans to shut a quarter of its stores and launch shops in better locations.
The plans had been bearing fruit, with Alexon reporting underlying interim pre-tax profits of £950,000, up from £900,000 last year, and sales up 0.4% in the second half before the snow struck. Alexon said its efforts to boost online and mail order sales should help limit the impact of poor weather on the business in future.
Alexon has 63 UK stores and around 1,100 concessions and stand-alone stores across Europe. It now operates websites for all six of its brands and has also opened a stock clearance page on auction website eBay.