Toy firm hit by collapse of Woolworths

AN Oldham firm has seen its sales hit by the collapse of Woolworths and the downturn in the economy.

Toy distributor Character Group suffered a poor Christmas trading period with sales down by 35 per cent against the comparable period in 2007.

The business, which has its main logistics and distribution hub and the Leesbrook Mill, Lees, was hit by the closure of the Woolworths stores, one of its largest UK customers.

Chairman Richard King said: “It is a credit to our management team that Character Group was able to reduce its exposure to this retailer from in excess of £5 million in September last year to around £1 million at the time of the Woolworths store closures.

“At the same time we managed to reduce our total stock levels which included the additional stocks purchased to service the Woolworths account.

“From a general perspective, we are going through a difficult trading period with new challenges coming forward each week. This past week has brought new lows to the banking sector which is bound to have a knock on effect in the consumer market.

“It would take a brave person to forecast the next few months in virtually any business arena or around the globe.”

However, he said that Character Group is “privileged to have many trading advantages” which the directors believe will help the business overcome the trading adversities.

He added: “While it is far too early in the trading cycle to be able to forecast revenues and profitability, there is no doubt that the first half of the current financial year will show a loss due to the lower sales in general, increased promotional costs and the one-off losses relating to the Woolworths account.”

Character Group said the business had maintained a strong and healthy balance sheet and has no bank borrowings .

“We are optimistic that we are not restricted by the current financial turmoil, “ concluded Mr King.