Gazal sheds staff amid turmoil

SYDNEY: Listed apparel group Gazal has shed staff at its head office and adopted a radical cost-cutting program to help it see out  the tough economic climate facing the sector. In an address to shareholders released this morning (November 27) Gazal chairman JW Blood said the company had undertaken a critical review of all overheads and cost structures with head office staff numbers "rationalised" and areas such as business travel, communications and certain advertising slashed.

"There is little doubt that globally and domestically we are experiencing some of the most uncertain financial and economic times we have seen in the last decade or more. Since reporting our full year results in August, the economic conditions that directly impact the company have deteriorated significantly. We have a sharp decline in teh value of the Australian dollar and significantly greater weakness in consumer spending."

Blood said the company was also in the process of actively re-negotiating its buying prices with Asian suppliers and intended passing on price increases to its wholesale customers effective from February 1.

"Given that these initiatives have only commenced recently and subject to where the Australian dollar may move in the New Year and subject subject to whether retail sales deteriorate further or otherwise, it is too early to assess to what extent all of these variables will have on second half earnings."

Blood said the company would provide shareholders with an update in the new year.

Brands owned by Gazal include Clavin Klein, Van Heusen, Bisley, Davenport and Midford.