Fashion retailer, Deacons East Africa (NSE: DCON) has issued a profit warning for the full year ended December 2017 compared to FY 2016.
The high-end clothing retailer expects its profit after tax to drop attributed to Kenya’s presidential elections during the half year of 2017 that led to low consumer spending.
“The board of Deacons (East Africa) PLC wishes to announce that the earnings for the current financial year are expected to be lower by at least 25 per cent than the earnings reported for a similar period in 2016,” the retailer’s board said in a statement.
It posted a net loss after tax of KSh180.4 million for the first half of 2017 from KSh52.6 million reported last year.
Deacons’ revenue increased five per cent to KSh1.07 billion compared to Sh1.03 billion in a similar period last year, while net operating profit shrunk by 32 per cent.
In October, Deacon’s board approved the sale of Mr Price franchise in Kenya.
The retailer said the decision was informed by Mr Price Group proposal to buy the franchise.
The deal, if approved, will see the firm purchase and operate all the 11 Mr. Price Home and Mr. Price apparel stores in Kenya.
Deacons has franchises for a number of South African brands, including Truworths, Woolworths, Identity, Sheet Street, 4u2, BabyShop, Angelo, Reebok, Addidas, Lifeftness and Bossini.