Shaver Shop has emerged as the latest dud sharemarket float of 2016, warning investors that weak pre-Christmas sales will leave earnings short of the forecast included in its prospectus which was issued mid-year.
On Friday, its shares slumped 14.7 per cent to 70¢, ending down by a third from its issue price of $1.05. The shares hit a post-listing high of $1.22 in August and have been very weak in recent weeks.
In particular, rumours of institutional investor selling has pressured its shares, the comany told the ASX Friday with speculation an institutional investor in the company had lost an investment mandate, forcing the sale of its holding in the company.
Shaver Shop operates the eponymous chain of around 100 stores across Australia and New Zealand selling "male and female grooming products", including electric shavers through to female hair removers.
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It blamed weak trading recently in key gift-giving lines such as hair styling products for its woes.
Along with weak pre-Christmas sales, the retailer blamed the closure of its Queensgate outlet in New Zealand following the recent earthquake for its weaker than anticipated sales.
New product launches have failed to revive sales, it said.
"We believe that the softness in trading (relative to expectations) is isolated to a small number of issues," the company said in a statement.
Addressing analysts in August, Mr Cameron made it clear that Christmas and Boxing Day sales forms a key part of the retailer's annual sales trajectory.
"We're a very seasonal business," Mr Fox said. "The key, obviously, is having a successful Christmas and Boxing Day period."
At the same time, he conceded that sales in one of its key product areas, "long term hair removers", had been weak, along with some unspecified product category declines which it had been seeking to reverse. The specialty retailer has been pushing to lift sales in the wet shaving area, where some products have much lower margins than it enjoys in other product areas.
Mid-year, Shaver Shop raised $98 million from investors, with $18 million of that pocketed immediately by the company's backers, including the chief executive, Cameron Fox, who received $1.8 million.
The two stockbrokers who follow the company - Ord Minnett and Shaw and Partners - both had "buy" recommendations on Shaver Shop shares and $1.45 share price targets prior to Friday's profit warning. Ord Minnett took the company public.
Mr Fox has been contacted for comment.