Readers who followed our advice in May and sold fashion house Slimma will be relieved, with the price, then 40p, having capitulated in the intervening months.

Forces seem to be conspiring against this business, which sells its ranges to independent retailers and mail order customers both at home and abroad.

Woeful financials for the year to September have hit its market value further, with non-executive chairman Carolyn Simons reporting a reversal from pre-tax profits of �171,000 to losses of �1m on a sales decline to �15.7m (�18.5m), compounded by a rise in the interest bill from �27,000 to �164,000 – year-end net debt was �2.57m, substantially higher than the current market cap.

Simons blamed ‘an extremely challenging trading climate’ last year, beginning with unseasonably warm weather in ‘autumn/winter 2006’ and exacerbated by bad summer weather, interest rate rises and oil price-inspired margin pressure, with Slimma reeling from rising logistics costs. Furthermore, the loss of key lingerie customer Contessa (sold during the year to La Senza) caused a sales shortfall and substantial losses within the lingerie brands business. With the exception of the Frank Usher brand, which increased orders to UK independents, all other brands performed poorly (Peter Martin and Slimma were notable casualties) and branded sales were affected by aggressive price moves by a competitor.

Not that the year progressed without positives – Slimma’s lingerie brands were taken up by the company’s largest mail order customer and hopes are high for the January launch of ‘Splendour.com’, the group’s first e-commerce site. With the dividend skipped, however, the shares remain a sell.

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