Chris Langley, Chief Executive of Jessops, one of the UK’s largest photography retailers, has resigned “to pursue other business interests”. Langley will remain until the end of November to assist with planning for the Christmas trading period and other handover projects. No successor has yet been announced. Jessops have also confirmed that the year to 30 September 2007 will see a loss of £7.5 million. Total sales for the 51 weeks to 23 September 2007 were down by 7.5%. Commenting on today’s statement, Executive Chairman David Adams said: “Following a tough year for Jessops, I am pleased with the progress that the Group has demonstrated against a difficult market backdrop.”

Jessops Press Release

Pre Close Statement and Board Changes - 27 September 2007

Jessops plc will announce its preliminary results for the year ending 30 September 2007 at the beginning of December 2007.  Prior to entering its closed period, the Group today issues a trading statement.

The Board reaffirms that the year to 30 September 2007 will be in line with the guidance of a loss (before tax and any costs relating to the strategic review and amortisation of re-financing fees) of £7.5 million given on 21 June 2007.

Total sales for the 51 weeks to 23 September 2007 were down (7.5%) and like for like sales were down (8.7%) in the same period. While sales performance since the last announcement has been severely impacted by the restructuring activity, this has been mitigated by an improvement in gross margin delivered through an improved availability of new products and promotional activity over the summer. In addition, we have driven more savings from the cost reduction programme than originally anticipated, and this puts the Group in a stronger position going into the next financial year.

The Group is on track with Phase I of the Strategic Review announced on 21 June 2007 as summarised below and a full update will be given with the preliminary results:

  1. Store closure programme: Of the 81 stores identified for closure over 60% will have been closed by the end of this week with a further 10% in advanced stages of negotiations. All the remaining stores will be closed by the end of October;
  2. Disposal of clearance stock: We have increased the previously identified total of £15.2 million to £17.0 million following further investigation. Only around five per cent of this will remain in the business by the end of October following our clearance operation;
  3. Cost reduction programme: This exercise will deliver in excess of the £1.8 million of cost savings identified at the Support Centre by the Group in June. These savings represent over a 20% reduction in total Support Centre pay costs and a reduction in headcount from 365 to under 285; and
  4. Confirmed banking arrangements: The new facilities announced on 21 June 2007 have been signed and, in line with the documentation, the first warrant instrument over 5% of the share capital was issued to HSBC on 30 August 2007.

Exceptional costs will be marginally higher than indicated on 21 June 2007 with higher costs of the stock clearance programme being partially offset by reduced costs within the store disposal programme and less costs arising from realising the Support Centre cost reduction programme. Nevertheless, our focus on cash has meant that year-end debt will be better than expectations.

Board Changes
Chris Langley, Chief Executive, has resigned to pursue other business interests. He will remain with the Group until the end of November to assist the Board with planning for the Christmas trading period and other handover projects. The process to recruit a successor will commence immediately.

In the interim period, David Adams, Executive Chairman, will take a more hands on role supported by an Operating Committee comprising the senior executives in the business.

The search for a new Finance Director is underway and the Board has also commenced the search for an additional Non-Executive Director. The Board is looking for a candidate with a track record within a branded retail environment.

Commenting on today’s statement, David Adams said:

“Following a tough year for Jessops, I am pleased with the progress that the Group has demonstrated against a difficult market backdrop.  We are on track to deliver Phase I of the turnaround plan and we are progressing Phase II in the Autumn. With the restructuring activities and associated disruption scheduled to be completed by the end of October I am confident that we have the plans in place, together with an experienced senior management team, to ensure continued progress.

“On behalf of the Board I would like to thank Chris for his significant contribution to the business.”

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