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Sales Dip at Photographic Chain
Press Association Newsfile

Jessops became the latest high street retailer to feel the impact of a bad Christmas today after sales stalled at its photographic stores.

The firm said like-for-like sales were down 6.9% in the six weeks to January 5 as the market for digital compact cameras remained ``soft''.

Jessops was also hit by supply shortages of the popular Canon and Nikon digital SLR cameras which meant it was unable to meet demand.

``Whilst it is still early in the financial year and Jessops makes the majority of its profits in the summer months, the impact of these ongoing SLR supply problems and the continuing softness of the digital compact camera market has led the board to take a more cautious view of the year as a whole,'' the firm said in a statement to the stock market.

``Accordingly, the board now expects that the out-turn for the full year will be broadly in line with last year.''

Jessops, which has around 315 stores, banked pre-tax profits of 17 million last year. Analysts had been hoping for profits of 18.8 million this time around.

The group typically makes around 25% of its profits over the Christmas period and is more reliant on trade over the summer months, when customers buy cameras and print pictures for the holiday period.

However, it said demand for digital SLR cameras was ``strong'' over Christmas but trading was hurt by the problems at Canon and Nikon.

Jessops said it was working closely with the two camera makers to resolve the supply issues.

Like-for-like sales remained positive - up 4.2% - during the first eight weeks of the financial year to November 26, but the weak December meant sales were down 1.9% in the 14 weeks to January 5. That included the 6.9% fall in December and early January.

The company said: ``Lower December sales compared to last year reversed the positive like-for-like sales trend seen in the first eight weeks of this financial year. Margins were maintained and were in line with expectations.''

Analyst Christian Koefoed-Nielsen, of Panmure Gordon stockbrokers, cut his full-year pre-tax profits forecast from 19 million to 16.8 million and downgraded his rating on the stock. Shares in Jessops slumped 13% today.

Mr Koefoed-Nielsen said: ``Weakness in the compact digital camera market has been exacerbated by supply shortages in higher-end SLR cameras, leading to weak Christmas trading and profit downgrades.

``While we expect trading to improve once supply shortages are ironed out, and the company's key trading period is summer, we are downgrading from buy to hold,'' he added.

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