Monsoon cuts back after store expansion

Monsoon is to rein in spending and cut costs after burning through all its cash during the toughest year in its history, which saw its profits fall.

Peter Simon, the chairman who abandoned his attempt to take the clothing retailer private last year, admitted it had been knocked sideways by its purchase of 43 ex-Etam stores.

The integration of the outlets proved a distraction, hitting margins and underlying sales, he admitted. All parts of his empire are under review, including the group's overseas businesses, which some observers believe Mr Simon would like to demerge and take private.

Mr Simon warned he had "increasing concerns" about the group's growing exposure to more volatile revenue streams from high-risk countries such as Russia.

Monsoon's trading woes continued into this year, with a 7 per cent fall in like-for-like sales during the past seven weeks. In the year to 27 May, the group's underlying profits fell 2 per cent to £58m.