Home shopping and educational supplies group Findel announced a
profits warning ahead of its final results for the year ended
31st March. The company, which operates the Express Gifts credit
business alongside Findel Direct brands such as toys catalogue
Letterbox and sportswear website Kitbag.com, said that “in
light of the deteriorating economic climate” it has had to
increase the provision for bad debt in its home shopping division
by £5 million. It now expects profits to be
“marginally lower” than anticipated.
Just two weeks prior to this update Findel had announced record
sales of approximately £640 million, an increase of 17
per cent on the previous year. It is understood, however, that
some of Findel’s customers who use its credit facilities have yet
to meet payments for purchases made before Christmas.
Findel’s share price tumbled more than a third, to 280p,
following the announcement prompting speculation about the
company’s health. Nevertheless, Findel remains optimistic,
expecting profits to be ahead of last year’s.
Findel’s announcement has had a knock-on effect on other
retailers operating a credit business. Both home shopping group N
Brown and cataloguer/retailer Next saw share prices dip, fuelling
further fear of the extent of the credit crunch.