Jane Norman hit by profit slump

PROFITS at Jane Norman, the fashion chain popular with 16-25-year-old women, fell by more than half last year as the recession took its toll on the younger generation.

Accounts filed at Companies House reveal that pre-tax profits slumped to 12.8 million in the year to 28 March 2009, down from 26.1m previously, as the chain was forced to take an axe to prices in order to clear stock. Its core market – young women who look for catwalk adaptations at more affordable prices – felt the pinch of the recession while some of the chain's collections also received a lukewarm reception.

However, Ian Findlay, finance director and deputy chief executive, said sales in recent months have staged a comeback. Like-for-like sales were up 5 per cent in the ten weeks to 2 February.

Findlay admitted that Jane Norman – which has about 170 UK stores – "lost focus" when its Icelandic investor Baugur and lender Kaupthing collapsed last year but he said its collections are now "getting back to the Jane Norman look".

The chain recently restructured its 136m debt pile with a syndicate of 11 banks, led by Royal Bank of Scotland, in a deal that saw the lenders take an 80 per cent stake in the company in exchange for delaying debt repayments until March 2011 and relaxing its banking covenants.