FASHION chain Alexon reported losses of £8.1 million today after the collapse of its Bay Trading subsidiary capped a difficult half-year period.
The owner of brands including Ann Harvey and Kaliko said trading at the start of the second half had also been challenging, but chief executive Jane McNally stressed the groundwork was being put in place for a turnaround.
She pointed to new brand identities for its key brands, clearer direction on product design and "encouraging early signs" from new autumn ranges.
Alexon, which has 85 shops and 880 concession outlets in the UK, dived into the red after it took £9 million of exceptional costs, mainly relating to onerous leases stemming from April’s administration of Bay Trading.
The collapse came after insurers withdrew crucial trade credit cover, thwarting plans by Alexon to revive the chain’s fortunes with a revamp, a new design team and fresh product lines.
Stripping out the impact of one-off items, profits for the six months to August 1 fell to £900,000 from £6.9 million a year earlier. Sales were 11% lower than the prior year, with like-for-like sales down 12.6%.
The brands Dash and Eastex produced the strongest performances, while margins suffered at Alex & Co, Minuet, Kaliko and Ann Harvey due to the need to clear stock.
Like-for-like sales are also down in the second half of this year, but Alexon said this was due to its decision not to repeat sales activity of last year.
Ms McNally, who joined the company in June 2008, said: "We believe that overall performance is stabilising and is being aided by additional benefits of some of our recent initiatives including the new store and concession refits as well as increased space.
"There have also been some encouraging early signs from within the new autumn/winter ranges, particularly for those brands whose turnaround is more advanced."