Evening Standard (London): Boots puts on a brave face as sales slip again

SALES are still on the slide at Boots but chief executive Richard Baker today hailed the performance of the health and beauty retailer as one of the best in the High Street.

He sees no early improvement in the trading environment. " Conditions on the High Street are difficult, competition is intense and there is nothing to suggest this will change in the coming months," he said. "It's very tough out there. It's going to have to be hand-to-hand for the rest of the year."

Underlying same-store sales fell by 0.8% at the 1400-shop Boots the Chemist chain but Baker said the figure would have been nearer 0.3% had it not been for changes to dispensing regulations.

"I can't think of many High Street 'biggies' who have produced figures like this - MS were down by 9%, Next by 6% and Argos yesterday by 4%. As I have seen others produce figures in recent weeks, I have become more cheery."

Baker says the recovery programme remains on track and he is sticking to his full-year forecast of like-for-like sales growth at the chemists chain of between 0% and 2%. "We always knew the first quarter was going to be our toughest and we were up against strong comparatives," he said. He is particularly pleased with the performance in beauty, where sales were up by 6%. "Beauty is the star of the first quarter," he said.

The relaunched No 7 brand has seen double-digit growth, and also had a "halo effect" on the other ranges. The group's glossy new advertising campaign, Trust Boots, is being well-received although it is "too early" to see if it will have an impact on sales, Baker said.

The sale of Boots Healthcare International, the Strepsils, Nurofen and Clearasil business, is proceeding as planned.

"There's been a very good level of interest," Baker said. GlaxoSmithKline and Reckitt Benckiser are both said to be interested. The sale is expected to raise more than Pounds 1 billion, the bulk of which will be handed back to Boots shareholders.

Boots Healthcare International sales grew by 5.8% with sales of core brands ahead by 8.9%. Total group sales for the quarter, including new space, rose by 1.5%.

Tables turn at London Clubs

WHILE hoi polloi do their credit cards on the blackjack and virtual roulette wheels of cyberspace, good old-fashioned highrollers at the smartest tables in London casinos have been cleaning up.

London Clubs International said today a torrid Christmas and New Year at its Les Ambassadeurs flagship - retail billionaire Philip Green is said to have won Pounds 2 million one evening - sent the group tumbling Pounds 1.4 million into the red in the year to 27 March, against a Pounds 2.5 million profit last time. But new chief executive Bill Timmins is bullish about current trading. New gaming regulations in October will mean he can fill his less-exclusive clubs with more electronic roulette terminals.

"I am not sure people fully understand how dramatically this business is going to change," he said.

.LINGERIE maker Sherwood today warned of a raft of lost contracts and the impact of the consumer downturn. It has lost a Pounds 3 million-a-year contract with the recently-sold Littlewoods stores group and a Pounds 750,000a-year deal with collapsed department stores chain Allders. Two of its swimwear suppliers are now going direct to its customers.

Swimwear sales were hit by poor early summer weather.

.PROFITS at troubled MFI, Britain's biggest furniture retailer, tumbled from Pounds 31.1 million to Pounds 22.9 million before exceptional items over the first half, although this was better than some analysts feared. At the pre-tax level, earnings surged to Pounds 58.5 million from Pounds 30.1 million on sales ahead by 7.7% at Pounds 757 million. MFI's Howden Joinery arm pushed its operating profits up 27% to Pounds 43.6 million in the 24 weeks to 11 June.