Jacques Vert back to profit after cutting down to 874 outlets

Jacques Vert Plc, the womenswear clothing retailer, announced annual profit of £5.3m, for the 53 weeks ended 30 April 2011, in with an update on trading for the nine weeks since that date. Retail Sales up +2.6%, adding a 2.0%

on a like for like basis, whereas profit before tax upped 3.1%, dragging the proposed dividend up by 3%.

“With positive like for like sales, our brands have performed well in what has been a difficult trading environment. Operationally, we have taken significant steps forward and are well positioned for the future. Although we have made a good start to the new financial year we remain cautious for the year as a whole,” Steve Bodger, Chairman, said.

Profit before tax for the year of £5.3m compares with a profit of £5.1m in the prior year. Jacques Vert has made a special effort to develop their e-commerce business, also boosted by the increasing performance of Jacques Vert and Precis. Significant investment has been also made in new systems and infrastructure, seeking for a stronger positioning within both national and international female clothing sector.

“The return to the dividend list last year was well received by shareholders and I am pleased to report the Board is proposing an increased final dividend of 3% to 0.67p per share in respect of the year ended 30 April 2011. Bodger showed his belief in this financial year will be challenging but the first executive is confident that the business is well positioned to benefit from any improvement in the market. “Our return to the dividend list last year after such a long absence, was well received so I am very pleased we are proposing a higher payment this year”, added Bodger.

“Against a backdrop of an unpredictable retail climate the business has performed well”, summed up the company´s management. Total sales for the year at £118.4m – compared to 2010’s £115.3m, were 2.6% ahead of last year. Like for like sales were 2.0% ahead of last year. Conscious of their need to dramatically cut down operational costs, at the end of the year the group operated from 874 outlets compared with 960 outlets at the beginning of the year. The present year has brought a negative impact of the level and frequency of markdown activity on gross margins.

In addition, as noted at the time of the Interim statement, gross margin is also being eroded by supplier cost inflation. The cumulative effect of these factors has resulted in gross margin declining slightly to 62.8% (2010: 63.7%), explained in the report. Also they noticed a rise in distribution costs, which comprise mainly of the costs of operating stores, from £56.9m to £58.3m. “Despite the challenging market conditions we are well placed for the new financial year; the new Jacques Vert Autumn/Winter 2011 collections have been well received by customers, we have secured new premium concession space in host stores and believe there are further opportunities to develop our ecommerce business both in the UK and internationally. In addition, when the new systems implementation has been completed it will open up opportunities to improve significantly the operating effectiveness of the business, although the benefits will not be seen until the next financial year” as summarized the Chief Executive, Paul Allen.

The group retails four womenwear brands: Jacques Vert, Windsmoor, Planet and Precis. Sales are made predominantly in the UK, Canada and Ireland through circa 870 outlets and through the Group’s own website and third party websites.