There was no cause for celebration last week when gift card and wrapping paper maker IG Design (IGR:AIM) warned its full-year results would be ‘significantly below’ market forecasts due to problems with its Americas division.

On the day (17 January), the shares crashed 83p or 58% and they continue to move lower due to third-quarter trading which was negatively impacted by ‘challenging retail conditions’ in the US culminating in one of its major customers re-filing for Chapter 11 bankruptcy protection.

This forced the company to put aside ‘significant’ provisions in the region of $15 million to offset its exposure to the amounts receivable from customers as well as the inventory the company is holding on their behalf.

Adding to its woes, a number of other customers in the Americas experienced ‘considerable distress’ over the Christmas period due to weak sales, leading them to reduce or delay their orders, which in turn impacted IG Design’s revenue forecasts, production scheduling and its ability to absorb costs.

The firm recently parachuted in a new Americas chief executive with considerable expertise in the consumer sector, in particular paper and textile crafting, who certainly looks to have her work cut out already.

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