Ongoing performance problems with its new La Voca store concept have forced fashion retailer Noni B has announced a profit downgrade for 2007-08.
Noni B announced yesterday that it will incur a one-off cost of up to $2.5 million restructuring the La Voca chain. That will mean a forecast fiscal 2007-08 profit of between $2.5 million and $3.2 million, well down from last year’s $8.3 million result.
The restructure will effectively mean the demise of the La Voca chain concept, with around half of the stores to be re-branded as Noni B and negotiations commenced to seek to relinquish leases and close the remaining stores
“La Voca has had to face a significant headwind, with consumer demand weakening over the past year. The stores are taking longer to make a profit than we anticipated and more value will be created for our shareholders through focusing all management resources and energy on the growth of our core Noni B business,” Noni B chairman Robert Critchley says.
Crane hire firm Boom Logistics also announced a lower profit forecast for 2007-08 of $22 million, down from an earlier forecast of a full year after tax profit in the vicinity of $30 million.
Underperformance in the business’s West Australia operations was a major contributor to the downgrade, the company says.
On the positive side of the ledger, travel agency Flight Centre announced in increase in its pre-tax profit forecast for 2007-08 to just under or at $215 million, well up on its 2006-07 pre-tax profit of $151.6 million.
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