INVESTORS hoping for signs that McBride had permanently cleaned up its act were left disappointed yesterday. After a second profit warning in the space of three months, the detergents maker has flagged up possible site closures and job cuts.
The drastic measures come three years after McBride’s last restructuring, which went by the name of “Project Refresh”. At the time, the company shuttered its Burnley plant and decided to hone in on laundry, dishwashing and specialist cleaning products, which it supplies to the vast majority of Europe’s 50 biggest retailers.
The overhaul cleared a lot of dead wood from McBride’s business model, but it did not reckon on quite how tough it would become to sell to thrifty shoppers in the years ahead.
Supermarkets, fighting tooth and claw to keep market share, offer steep discounts on brand-name goods that thrifty shoppers pick up at the ends of the aisles instead of generic white labels. Even pound shops offer deals on household names, bought wholesale and stacked in the windows to tempt customers.
Analysts have rushed to downgrade the stock today, and even house broker Investec cut its profit forecast by a fifth to £22.3m for this year, despite the company’s promise of new products in the pipeline.
The test for McBride is whether these new items can attract customers already used to brand-name bargains – once consumer confidence starts to really accelerate across Europe, the firm needs to have found its niche.