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Aga blames Lehman as cooker sales cool
20.10.08
Aga, maker of ovens for the well-to-do, today cited a massive "Lehman Brothers effect" as it issued a profit warning.
Sales have plummetted in the past three or four weeks as customers suddenly put off their spending plans. The slowdown started with the collapse of Lehman in mid-September, which triggered panic in global financial markets and spooked consumers.
Aga adds its name to a steadily lengthening list of businesses ranging from car dealer Inchcape to estate agent Savills issuing profit warnings since the bank collapsed. Even John Lewis, favourite store for the Aga set, said last week that sales had fallen dramatically.
Aga chief executive William McGrath said: "The Lehman effect is really very significant. There was already a backdrop of anxiety but the sudden downturn in the last few weeks all seemed to start there."
The sales decline has been across the board, he added, across all product categories and in London and the regions.
"I have to say the timing has not been great, as this is usually our busiest time of year. People usually get their kitchens done up in September, October and November," he said.
Aga warned second-half operating profits would be "appreciably below" the £9 million it made in the first half. On the plus side, McGrath said the company's fuel-efficient Rayburn system had been selling well.
