The other factors which contributed to the profit shortfall were significant increases in costs, particularly host store commissions and shop overheads; the loss of the Group's profitable business with the former Allders Group; and the launch of Mandolin, our new High Street brand, which has got off to a much slower start than expected.
Alexon Brands Operating profit for the division was £20.9 million against £25.1 million last year. Whilst like for like sales were level with last year, gross margins were lower reflecting an increase in markdown activity necessary to keep stocks under control.
The strongest performing brands were Eastex and Alex & Co, closely followed by Minuet and Dash. Kaliko was flat against the prior year whilst Ann Harvey was disappointing.
The division was hit particularly hard by increased host store commission rates and the closure of its Allders business, which led to a reduction of some 77 outlets.
In October we launched a new middle market brand, called Mandolin, in 17 high street shops that were underperforming outlets transferred from elsewhere within the Group. The brand has significantly underperformed our plans, leading to a radical review of the product offer, the benefits of which will not be seen until autumn 2006 onwards.
Dolcis Dolcis had a disappointing year with an operating loss of £0.7 million, against £3.6 million profit in the previous year. Of this loss, £0.4 million was due to impairment of fixed assets. Like for like sales were 6 percent down, on gross margins lower than the prior year.
Style Menswear Menswear recorded an operating loss of £2.6 million (including £0.7 million impairment provision) compared to a profit of £2.2 million in the prior year. Like for like sales were 9 percent down, although gross margins were slightly higher.