MELBOURNE: Pacific Brands bounced back to profit in 2009/10, citing "the strength of our key brands and the benefits of our transformation program".
The Hawthorn-headquartered company reported net profit after tax for the 2009/10 financial year was $52.7 million, up from a loss of $234.5 million in 2008/09.
Reported sales declined by $217 million, or 11.1 per cent, on the prior year.
Pacific Brands CEO Sue Morphet attributed the decline in sales to business divestments and the discontinuation of select brands and labels.
“Our overall result held up despite challenging market conditions and the extent of restructuring implemented internally,” Morphet said.
“The sales result was disappointing, although we made pricing adjustments to mitigate the impact of lower hedged exchange rates and had to operate in a tougher than expected retail market, especially in the last six months.
“Sales to department stores were up and sales to supermarkets were steady. Sales to discount department stores and other channels were down.”
The company revealed sales in its underwear and hosiery category were down 10.9 per cent to $539.4 million, with Bonds recording a “difficult” second half while Berlei and Jockey grew in the same period.
Workwear sales were down 2.5 per cent to $379.5 million, while footwear, outwear and sports sales were down 18.7 per cent to $399.3 million.
In the footwear category, sales grew for the Clarks, Grosby and Hush Puppies brands but declined for Slazenger, Dunlop, Mooks, Everlast and Volley.
“Footwear, outerwear and sport was our most disappointing result,” Morphet conceeded.
“We have put in place new management that has stabilised the business and is now working on turning around its performance.”
The company said its 2010 transformation program was “on track”, with Morphet “extremely pleased” with the way in which the company's manufacturing closures were managed.
“To close 10 sites in approximately 12 months and also resource that same product off-shore without any major issues has been an excellent achievement built on the back of more than 50 years of sourcing experience in Asia,” Morphet said.
Pacific Brands said the uncertain economic environment and challenging retail conditions made it difficult to predict its performance in 2010/11. However the company reaffirmed the implementation of its transformation program would create a “stronger business” for the coming years.