Bowie Castlebank upbeat despite £13m loss

[askey]

February 02 2007

Bowie Castlebank, the troubled owner of the Klick Photopoint, William Munro dry cleaners and Max Spielmann photo-processing chains, yesterday delivered an upbeat outlook, saying it was on target to return to profit by 2008 - despite posting a daunting £13.1m pre-tax loss for the year ending March 2006.

The Glasgow-based, family-owned group, which oper- ates over 330 shops across the UK and employs more than 1500 staff, has been on the ropes since the digital photography revolution devastated the group's core business of 35mm film-processing business.

The company said last year's hit was down to a one-off restructuring cost of £9.5m, incurred as the company continued its transition to digital film processing.

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Operating losses narrowed to £3.1m, from £5.2m in the previous year, showing an improving underlying trend, said finance director Mark Ross.

Headquartered off Byres Road in Glasgow, the 140-year-old Bowie Castlebank had embarked on a massive expansion, snapping up the Max Spielmann chain of 180 film-processing stores for £25m in June 2001 and 77 Supasnaps stores in spring 2004.

That deal came shortly after Bowie Castlebank owner, Jonathan Bowie, won the consumer category of the Ernst & Young entrepreneur of the year awards.

Bowie was also ranked 43rd in last year's Sunday Times Scottish rich list, with an estimated £78m fortune, just behind Sir Sean Connery in the league table of Scotland's wealthiest individuals.

However, the company was then hit by an operating loss of £5.1m in the year to March 31, 2005, compared with a £5.2m profit in the previous 12 months, and it was forced to shed more than 200 stores and 1400 staff.

Since then, however, the company has invested heavily in new instant-print kiosks to catch up on the dramatic growth in digital cameras and camera-phones and consolidate its central film processing facilities.

Ross said yesterday: "The company is now beginning to see the benefits of this restructuring exercise together with its investment in digital equipment.

"As we expected, the growth in digital printing is now starting to match the volume decline in the traditional film business with the result that like-for-like shop sales were up in the latest quarter, when other photographic retailers reported declines."

The company would now seek to further expand its digital offering in key areas such as cameras, home printing and photo-gifts in the coming year.

He added: "Losses are expected to narrow significantly in the current year with a return to profitability in early 2008."

[NeilT]

13m is a lot to lose !  

[photosave]

Nice to hear some up-beat news in our industry. I know (and agree with) how everyone feels about their discounting, but Klick does a good job with their services, merchandising and overall promotion.

I guess that when they culled the un-profitable stores that would have left only the best - so that how they've achieved same-store growth. Still a little hard to imagine where else it has come from. Anyone else know?

[roger sargent]

I agree with Photosave. Klick have taken some big steps to get back on track. Hopefully all the high profile photo retailers will have a good year as it will impact badly on our industry otherwise.

Our local Klick is crammed full of stock and all their emphasis seems to be on dye-sub prints through Kodak kiosks. The longer service kiosks have been relegated to the back of the shop. I don't think they are that interested in minilab any longer and someone told me they were thinking of only having kiosks in future. Apparently they have just recently bought an Indigo printer for Photo books and are going to bring production in house.