SYDNEY: Growing pressure from international suppliers, coupled with a sluggish performance from certain retail divisions, has been blamed for the Gazal Corporations' mixed performance in fiscal 2007.
While the retail and wholesale giant reported an after-tax profit of $8.37 million for the year ended June 30 2007, earnings before tax were lower by 1.3 per cent at $23.4 million compared to the previous year. Directors said gross profit margins were impacted by higher prices from Chinese suppliers as well the clearance of excess inventory at lower margins in certain retail divisions. Other factors included increased distribution and administration expenses as well as a one-off charge for the impairement of stores trading below "acceptable levels of return".
Directors said losses as a result of winding down the Mambo European operations of $2.018 million during the year were far less than compared to last year's loss of $4.064 million. While the Mambo brand continues to trade well in the UK market, it is understood the brand is still undergoing a strategic review with findings expected to be released at the company's annual general meeting in November.
Key Gazal Corporation brands include Calvin Klein, Van Heusen, Nautica, Bisley and Midford.