Falling UK sales and dollar trigger Body Shop warning
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Your support makes all the difference.Body Shop International yesterday admitted that underlying sales were still sliding across its core UK estate as it warned the weak US dollar would hit interim profits.
The company said like-for-like sales in the UK fell 7 per cent during its first quarter, dragging underlying group sales down 1 per cent. It said sales in the UK, which fell 13 per cent last year, continued "to be of concern". Its shares slumped 5 per cent to 152.5p, down from a five-year high.
Peter Saunders, the chief executive, said "unfavourable exchange rates and slower wholesale sales in certain countries" meant its half-year result would be below last year's. This would not affect the full year result, he added.
The company, which has transformed its prospects under a new management team, said it had acquired the majority of its Hong Kong franchisee business for £11m in cash and shares. It also unveiled plans to create a joint venture company with Marcus Tancock, its Hong Kong franchisee, to spearhead a push into mainland China.
The group is gearing up for its first significant expansion for almost a decade with a £100m programme that includes opening more than 300 stores in the next three years. It opened 35 stores during the first three months of this year, helping total retail sales to increase by 4 per cent during the period.
Richard Ratner, at Seymour Pierce, edged his profit forecasts higher to £34.7m on the back of the Hong Kong acquisition, which the company said would enhance earnings. Like-for-like sales at its Hong Kong business rose 6 per cent last year, while it made profits of £1.5m.
The group is also planning to acquire The Body Shop Canada's 108 stores from its head franchisees there. Franchisees own more than three-quarters of its 2,019-strong global estate.
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