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Hallenstein says it will continue to invest in its online business

Clothing retailer Hallenstein Glasson will continue to prioritise its investment in the online business after seeing the shift in consumer habits in New Zealand and Australia.

The company said it was able to easily lift capacity to meet the increased demand during the coronavirus outbreak, following the recent completion of new Glassons fulfilment centres in Sydney and Christchurch and Hallenstein Brothers in Auckland.

“We will continue to prioritise investment in this part of our business,” said Mary Devine, company group managing director.

“We believe that the significant increase in our online business most likely marks a permanent shift in consumer habits in New Zealand and Australia and we expect our online sales to represent a much larger share of our total sales in the future.”

Hallenstein said it has experienced significant growth in the online channel compared to before the COVID-19 health crisis. 

The company posted a decline in sales of approximately 32.1 per cent for the first 14 weeks of the current season, from February 2, compared to the same period last year.

This includes the period when all stores were closed in both New Zealand and Australia.

Profit after tax for the quarter, February 2 to April 30, is estimated to be a loss of approximately $2.8 million.

The retailer said with stores reopening this week it anticipates to trade profitably from May onwards although it expects that to be at a lower level than the same period last year due to a likely decrease in foot-traffic, increased levels of unemployment and related economic impacts.

Hallenstein Glasson’s stores in New Zealand, including web stores, closed on March 26 as well as its stores in Australia. Its online business in Australia, however, has been allowed to trade until now. Its online business in New Zealand started trading on April 4. 

Starting tomorrow, May 14, the company said there will be a phased reopening of the New Zealand store network for both the Glassons and Hallenstein Brothers brands with strict protocols in place.

In Australia, the retailer has started to progressively open stores as it navigates the various restrictions and consumer dynamics at a state level.

“Across our retail networks we will be adhering to the respective Government directives and our priority will be the health and safety of our team members and our customers,” the retailer stated. 

According to Hallenstein, since March the business has taken a number of steps to preserve liquidity including: lowering planned stock intake in line with reduction in sales; reducing operating and labour costs; applying for the New Zealand Government funded wage subsidy and Australian Jobkeeper payments; placing capital projects on hold awaiting a better understanding of future performance; negotiating with landlords to align appropriate arrangements to reflect the changing market conditions.

The company also said its directors, executives and leadership teams have agreed to a short-term reduction of their salaries.

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