Hallenstein Glasson 1H profit plunges

GlassonsNew Zealand clothing retailer, Hallenstein Glasson, posted a 21.1 per cent drop in first half net profit after tax, unaudited, to $6.81 million compared to the $8.63 million from the previous corresponding period.

The company reported a 1.4 per cent increase in total group sales for the six-month period ending February 1 to $112.39 million compared to the $110.86 million in the same period the previous year.

Hallenstein CEO, Graeme Popplewell, stated in a news release that, “while top line sales have been maintained in a very challenging environment, margin pressure due to a lower exchange rate has had a negative impact on profit”.

The gross margins on sales fell to 56.79 per cent from 60.42 per cent the previous corresponding period. Total expenses fell 1.4 per cent as the Auckland-based retailer took steps to preserve margin.

Hallenstein Glasson operates the Hallenstein menswear brand and the Glassons and Storm womenswear brands.

All the brands achieved postive sales growth with the exception of Glassons in New Zealand, with Popplewell telling investors that there has been a, “significant focus on improving the fashion offer” which should see better future performance.

During the period Glassons refurbished a key Auckland store at St Lukes. In addition, new stores were opened in October 2015 in Northwest (Auckland) for both Hallensteins and Glassons, while Hallensteins closed one store at Westgate (Auckland) at the same time.

During the second half of this financial year Glassons will move to larger premises in Eastlands (Melbourne), and Castle Towers (Sydney) and Storm will refurbish new premises in Lambton Quay, Wellington.

The company declared an interim dividend of 13.5 cents per share payable on April 15.

Popplewell said group sales for the first seven weeks of the season are on a par with last year although there remains pressure on margin.

He said the record temperatures in both New Zealand and Australia have not been conducive to early autumn sales and the retail environment in fashion apparel remains challenging.

But, he said, “on a more positive note our e-commerce business continues to outstrip growth in bricks and mortar stores, with sales for the first seven weeks of the season up 38 per cent. We anticipate this trend to continue and continue to put focus and investment into this part of our business”.

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