 Tough trading conditions continue to haunt Woolworths |
Retailer Woolworths has unveiled a drop in annual profits as competition on the High Street continues to bite. The Christmas spending spree did not continue into the new year, it warned, and consumer spending was expected to remain depressed in months to come.
Pre-tax pre-exceptional profits fell to �43.7m from �54.9m, the company said.
Icelandic group Baugur, one of the largest foreign investors in the UK High Street, has recently built up a 10% stake in Woolworths.
Early last year, private equity firm Apax abandoned a bid approach for Woolworth, and there has been persistent speculation that Baugur could make an offer.
Under pressure
The UK firm, which currently has 800 stores, said demand was below the levels seen during 2004 for most of last year, with sales of clothing suffering the worst because of price cutting from rival stores.
Sales of entertainment products were hampered by a lack of major new releases and price deflation, though toy sales fared well and beat last year's levels with stronger profit margins.
Woolworths said its entertainment wholesale and publishing businesses, which includes EUK and its 2entertain joint venture with the BBC, enjoyed a 14.9% rise in profits to �56.4m.
"This was a year in which the tough conditions on the High Street overshadowed the continued improvements in the underlying infrastructure of our business and a creditable trading performance," said chief executive Trevor Bish-Jones.
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