(Reuters) -Britain's Pets at Home launched a turnaround plan for its struggling retail business on Wednesday, looking to fix product ranges and cut costs after half-year profit dropped by a third. The
Pets at Home Initiates Retail Turnaround After Profit Decline
(Reuters) -Britain's Pets at Home launched a turnaround plan for its retail business on Wednesday, looking to fix product ranges and cut costs after missed opportunities in premium pet food and "self-inflicted" problems in accessories.
The retailer posted a 33.5% drop in half-year profit but kept its annual forecast unchanged after two profit warnings already this year because of lower customer spending on toys, treats and other discretionary products after a pandemic-era surge in pet ownership.
The plan, led by Chair Ian Burke, aims to address shortcomings in the company's pet food and accessories business, where it has been struggling with direct-to-consumer market entrants in premium pet food and poor accessory product ranges.
Shares in the company, which have lost more than 20% of their value in the past one year, rose nearly 4% in early trade.
Pets at Home's shift to a single fulfilment centre in Stafford, central England, and the rollout of a new digital platform had also proved more complicated to execute, adding to costs and leading to "lost and dissatisfied" customers, it said.
The company added its food business was over-exposed to ranges that have fallen out of favour with customers, who are seeking more plant-based, vegan and organic options.
Burke stepped into the role of interim CEO after Lyssa McGowan left in September after the second profit warning.
His plan involves fixing food ranges and boosting accessories through own-brand innovation and new brand partnerships, maintaining price discipline, improving business execution by simplifying strategies and planning better, and cutting 20 million pounds in overheads.
The company, which also offers grooming and veterinary services, said underlying profit before tax was 36.2 million pounds for the 28 weeks to October 9, compared with 54.5 million pounds in the corresponding period last year.
($1 = 0.7589 pounds)
(Reporting by Ankita Bora in Bengaluru. Editing by Rashmi Aich and Mark Potter)
