Oroton Group goes for gold

SYDNEY: OrotonGroup has reported a record half year profit result, following an extensive operational restructure.

The retail and wholesale group, which manages premium leather goods and accessory brand Oroton and Australian operations for Polo Ralph Lauren, has reported a net profit after tax of $10.4 million for the six months ended 36 January 2008. This is up 70 per cent from the corresponding period last year, which saw the group post $6.1 million.

Operational cashflow was up by 38 per cent while return on capital employed rose to 82.2 per cent for the last twelve months. Like for like retail growth was equally impressive with 17 per cent in Polo Ralph Lauren stores and 12 per cent in Oroton.

OrotonGroup CEO Sally Macdonald said the company's restructuring efforts over fiscal 2007 had finally flowed through to its bottom line.

"We replaced some wholesale with retail sales and decreased factory sales as part of our planned channel rationalisation and store program," she said. "We opened eight new shop-in-shop retail concessions in Polo Menswear in September 2007, replacing 30 wholesale doors, and all trading well."

Macdonald said Oroton's recently launched flagship store in Sydney's Queen Victoria Building was trading beyond expectations, despite increased international competition in the same centre. She said the company would continue to invest in store upgrades across its network over fiscal 2009, with offshore warehousing opportunities and an IT upgrade also set to bolster back door operations.

"Results are in line with expectations despite the current economic uncertainty. We are, however, prepared for several contingencies in the event of a slowdown, but remain cautiously optimistic due to the resilience of our two brands."

OrotonGroup sold its flailing designer brands Marcs and Morrissey to retail group M Webster Holdings in late 2006 for $6.3 million.