La Senza: Part of the Specialty Fashion Group brand stable.

SFG dips down

Retail giant Specialty Fashion Group (SFG) has reported a net loss of $2.8 million for the full year ended June 30, 2012, following a tough 12 months in the market.

The company, which operates brands such as La Senza, Millers, Katies and Autograph, confirmed the loss and total revenue for the full year of $572.5 million, delivering earnings before interest taxation depreciation and amortisation (EBITDA) of $21.7 million.

SFG said the net loss for the year of $2.8 million, also included an increase in depreciation of $2.8 million attributable to impairment of assets in relation to stores that are part of the company’s store rationalisation program.

However, SFG revealed that despite the challenging economic and retail market conditions which continued throughout the year to June 2012, the underlying trend in the group's sales and gross margins improved in the second half of that year, largely as a result of improvements made in its supply chain.

As a result, SFG CEO Gary Perlstein said the company will remain focused on enhancing its supply chain and through doing so improving its gross profit margin from the current level (58.1 per cent for the year).

This is being achieved through improvements in purchase commitments driven from reductions in the underlying cost drivers of fabric and product manufacture, more favourable hedged USD exchange rates and further internal improvements in supply chain management.

In addition, Perlstein said the company has continued to “aggressively pursue online sales growth and the delivery of omnichannel shopping experiences through investment in a new e-commerce platform, expansion of its online logistics operation as well as leveraging its customer relationship management capabilities”.

This includes pursuing new opportunities for growth in its new online business Stylefix.com, launched on July 2, 2012.

Going forward, he said the company also expects trading performance to imptove in the 2013 fiscal year, although it remains cautious as to the extent to which macroeconomic factors, both in Australia and abroad, may influence results.

“We have a strong balance sheet and this combined with the business improvement initiatives underway positions the company to trade solidly in financial year 2013, and improve the group performance,” Perlstein said.

“While growth of the womenswear market is expected to be low we are focused on pursuing expansion into new sales channels and product categories. We believe we have the largest women’s retail shoppers database in Australia and a unique opportunity to monetise this asset.”

As previously reported on ragtrader.com.au, SFG currently operates 893 stores and is in the midst of a store rationalisation program to close or exit from underperforming stores.

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