Pets at Home is implementing urgent turnaround measures as the UK pet retailer's profits plunged by more than a third. The company's retail arm saw profits collapse by 84.1% to £3.5 million in the six months to October 9, dragging overall group profits down 33.5% to £36.2 million.
Interim executive chairman Ian Burke, who took over after chief executive Lyssa McGowan's abrupt departure in September, announced a retail revival plan with four clear priorities: product, price, execution and cost. Burke said: «I've spent time visiting over 100 pet care centres and engaging with colleagues at all levels of the business to establish where the challenges are isolated, resulting in the implementation of a retail turnaround plan with four clear priorities of product, price, execution and cost.»
The company is «returning to our retailing roots to stabilise and rebuild momentum in our retail business, and to lay the foundations for a new chief executive in due course», Burke said. He acknowledged that «urgent and necessary action is needed to return the retail business to growth to meet both our own expectations and those of our investors».
Cost-cutting drive
Pets at Home aims to reduce overheads by around £20 million. The company has already begun implementing a leaner store operating model earlier in the year and is now looking at buying operations, store leases and distribution automation.
The firm said: «We will continue to look for ways to optimise our cost base either through reducing costs or redirecting them to areas that benefit customers.»
Retail struggles, vet business resilient
Retail consumer sales fell 2.3% in the first half. Accessories dropped 5.9% while food sales declined 0.3%.
The vet business, however, showed resilience with sales up 6.7% and underlying profits rising 8.3% to £44.9 million. This strong performance partially offset the retail arm's struggles.
Pets at Home maintained its recently lowered annual profit forecast of £90 million to £100 million, down sharply from the £133 million posted the previous year. The search for a new chief executive continues to progress.
Note: This article was created with Artificial Intelligence (AI).
