NATIONAL: The discontinuation of labels has negatively impacted the overall sales results for Pacific Brands for the six months to December 31, 2009.
It reported total sales revenue was down $81 million, or 7.8 per cent compared to the same period in 2008. Earnings were in line with the company's expectations.
It reported this comprised a $43 million decline due to aggressive portfolio rationalisation of brands subject to discontinuation, a $24 million decline due to lower Australian sales, as well as a $14 million decline for poor underlying international sales.
The company said these results were also impacted by currency changes and difficult market positions.
Pacific Brands chief executive officer Sue Morphet said key continuing brands had continued to perform well, with Bonds up four per cent, Mossimo up 22 per cent, Clarks up 12 per cent and Volley up six per cent. However total sales of continuing business and brands were down by approximately 3.2 per cent.
Group sales for workwear brands, such as KingGee, Yakka and Dowd were down 7.6 per cent on the previous period to $186.5 million, with EBITA down 24.9 per cent to $16.6 million.
For underwear and hosiery brands such as Bonds and Rio, total group sales were down 4.6 per cent to $297.1 million, with EBITA down 23 per cent to $34.9 million. It said this was impacted by the closure of some labels and the New Zealand based thermals operations.
Footwear, outerwear and sports group sales were down seven per cent to $262.4 million, with EBITA down 45.1 per cent to 19.1 million.
The company reported good growth in department store and supermarket store channels, while the independent retailer channel was impacted by tough economic conditions.
It said cash flow and net debt reduction were strong.
The company reported that the 2010 transformation strategy, announced 12 months ago, is on track.
Morphet said the company was reducing its cost base, focusing on margin and cementing new systems and processes across the group.
"All thse measures will ultimately deliver us a stronger more profitable business," she said.
Throughout the period the company decreased its non-manufacturing workforce by 650 people, reduced the cost of doing business by $36 million, closed seven factories with three more to close next month, among other changes.