Discount retailer B&M faced its second profit warning in three months, citing the need to reduce prices to clear excess stock. The company, which has seen its shares drop by half since May, initiated a “Back to Basics” strategy to streamline operations and cut costs by narrowing its product range across various categories.
In a recent trading update, B&M reported a 0.6% decline in same-store sales in the UK for the crucial three-month period ending December 27, which includes the holiday season. The company revised its full-year profit forecast to a range of £440 million to £475 million, down from the earlier guidance of £470 million to £520 million, signaling a significant decrease compared to the previous year’s £620 million profit. Besides market pressures, an accounting error last October involving £7 million in overseas freight expenses also impacted the firm.
CEO Tjeerd Jegen, who took the helm last year, emphasized the company’s focus on investing in clearing discontinued products and implementing pricing strategies for long-term growth, even though these actions may affect short-term financial results.
In other news, Waterstones managed to boost its annual profits slightly, offsetting rising labor costs. The chain, which expanded to 316 stores by May, reported a profit increase to £49.7 million from £45.6 million the previous year, with turnover rising from £528.3 million to £565.6 million. Efforts to enhance margins and control costs helped navigate the challenges posed by higher wages and national insurance contributions.
Moreover, HMRC is set to introduce a new points system to replace automatic fines for late tax returns, affecting self-assessment taxpayers. The tax authority is on track to collect over £1 trillion in tax revenue for the first time, driven by a combination of factors like additional contributions and fiscal adjustments.
Meanwhile, the Black Sheep Brewery, famous for its Black Sheep beer, has been acquired in a £4.5 million deal, securing 145 jobs. The brewery, now part of the Great British Drinks Company under Paramount Retail Group, will see additional investments to enhance its offerings.
Lastly, new bank This Bank launched today with an attractive 3.82% interest rate on easy-access savings accounts, aiming to provide competitive options for customers seeking higher returns on their deposits. Chase also offers a lucrative 4.5% rate for new clients, setting the stage for a competitive banking landscape.
Overall, these developments underscore the evolving dynamics in the retail, finance, and brewery sectors, reflecting ongoing challenges and opportunities within the UK business landscape.