RCG surges forward

RCG Corporation Limited, owner of footwear retailers The Athlete's Foot and the Super Shoestore, has revealed a record profit for the full 2012 financial year.

The results, for the year ended ended July 1 2012, saw a lift in consolidated earnings before interest tax and depreciation of 6.8 per cent from $12.4 million to $13.2 million.

Net profit after tax  also rose 2.8 per cent from $8.9 million to $9.2 million.

In addition, the company saw revenue and profit growth in both its The Athlete's Foot (TAF) and wholesale businesses, with the chain recording a total sales growth of 1.4 per cent from $199.4 million to $202.4 million, and an increase in earnings before interest tax and depreciation of 3.8 per cent to $12.0 million.

Like-for-like sales, however, decreased by 1.1 per cent, but sales strengthened in the second half of the financial year, with like-for-like growth of 1.2 per cent.

According to the company, this trend has continued in the new financial year, with sales for the first seven weeks of fiscal year 2013 increasing by 8.9 per cent on a like-for-like basis.

RCG Corporation CEO Hilton Brett said he was satisfied with the performance of the company given the difficult trading climate.

“Given the exceptionally challenging environment faced by TAF during the year, we are very pleased with the results our businesses delivered. The resilience of the group is a great testament to the focus, dedication and skill of TAF’s franchisees, management and staff,” he said.

However, despite growing total sales by 53.2 per cent to $8.9 million and like-for-like sales by 4.9 per cent, RCG’s other retail business, Shoe Superstore (SSS), had a more challenging year and posted a loss of $0.2m in earnings before interest tax and depreciation.

According to Brett, the business was most affected by the difficult economic environment and the fate of strip shopping precincts, where most SSS stores are located, which have been hardest hit by the downturn in specialty retail.

“Despite its challenges, SSS is an important contributor to the delivery of RCG’s overall strategy. It continues to innovate and lead the way in RCG’s online capability and is an important channel for our wholesale business.

"A full operational review of SSS is currently under way and steps are being taken to realign the business to appeal to a younger consumer with a greater proportion of vertical product,” he said.

Brett added that management expects to be able to measure the impact of some of these initiatives by the end of the Christmas selling season.

However, RCG was again buoyed by its wholesale and distribution division, which saw a sales increase of 52.1 per cent to $24.8 million and a rise in in earnings before interest tax and depreciation of 32 per cent to $4.1 million.

Brett said the figures were delivered as a result both of the growth of the Merrell business and the full scale commencement of the CAT business.

“This is an extraordinary result for a business which is less than three years old, and these results are a testament to the efforts of the team and the quality of the brands that they distribute, with further growth expected in the current financial year,” he said.

Going forward Brett said he expects the CAT brand to grow strongly across both the industrial and casual categories and deliver “substantial growth in FY13 and beyond”.

He added that there are also great expectations for the TAF brand to expand its market share, following the delivery of its own e-commerce site at the beginning of June, 2012.

“TAF has worked exceptionally hard with all its stakeholders, particularly its franchisees and customers, to deliver a seamless, compelling and engaging multichannel experience that not only provides customers with a unique online shopping option but also leverages the store network to drive greater traffic to the business as a whole,” he said.

“We are very pleased with the way the online business has begun and significant ongoing investment will ensure that we are always able to meet our customers’ expectations. We have no doubt that our commitment to multichannel will drive future growth through both the online and bricks and mortar channels.”

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