News Flash

Abbeycrest announces plan to Refinance facility

16 Jun '06

5 min read

As well as the general downturn in discretionary spending in the UK retail sector, a major factor on demand has undoubtedly been the extraordinary rises in gold price experienced over the last twelve months. At the time of writing, this has risen 50% in the last year. Whilst this obviously makes stockholding more expensive to fund, it also has a negative impact on demand as retailers and end customers scale back spending. In order to counteract this, the Group is focusing product development and sourcing on gemset product, rather than gold, and also alternatives such as gold plated silver and fashion jewellery.

The interim Chairman's statement noted that a substantive cost saving program had been actioned to counteract the market downturn and set the size of the business to reflect prevailing market conditions. This exercise is now substantially complete with progress since the half-year being:-

- In January 2006 the Group transferred the business of DRT Jewellery Limited (“DRT”) to its management by way of a sale of fixed assets and stock and transfer of personnel. DRT has suffered commercially since the collapse in the market for its principal style of lightweight wristwear, and has not made a meaningful profit contribution for some time. A supply agreement has been agreed for any current sales lines carried by Group customers.

- The sales force covering the UK independent sector was reduced by half in January 2006 and complemented by the introduction of a commercial web-site together with enhanced telesales systems and customer relationship management software.

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