Bonmarche 3Q Comparable Sales up 3.8%, Margins under Pressure -- Update

(Adds detail, broker comment.)

By Jana Simmons

LONDON--Value clothing retailer Bonmarche Holdings PLC (BON.LN) Thursday reported a 3.8% rise in like-for-like sales for the third quarter ended Dec. 27, but said gross margins remained under pressure in a competitive market.

"We are satisfied with Bonmarche's third quarter performance in a challenging, promotionally-driven market," Chief Executive Officer Beth Butterwick said. "Gross margins remained under pressure, but we continued to make positive like-for-like sales gains," she added.

The company, which focuses on women over 50 years old, expects full year results to be in line with expectations, despite the prolonged mild weather this autumn hitting winter clothing sales.

Brokerage Investec said Bonmarche's third quarter figures show that the retailer navigated a challenging market backdrop well and lifted its share price target on the company to 325 pence from 315 pence.

Elsewhere in the sector, Associated British Foods PLC (PFD.LN) said sales at its Primark no-frills clothing chain rose 15% over the Christmas period, while mother and baby clothing and products maker Mothercare PLC (MTC.LN) saw its U.K. like-for-like sales rise 1.1% in the third quarter.

At 1100 GMT, Bonmarche shares were up 7.0 pence, or 2.3%, at 308.5 pence.

Write to Jana Simmons at [e-mail]