Specialty defies the doldrums

SYDNEY: Specialty Fashion Group has announced strong full year results for the 12 months ended June 30 2008. The company  - which is one of Australia's largest owners of women's fashion retail brands, including Autograph, Crossroads, City Chic, Katies, Miller's and Queenspark - posted Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) of $50.8 million, a 7.3 per cent rise on the previous year.

Specialty Fashion Group CEO Gary Perlstein described the result as commendable "given the challenging environment for retailers."

"We've delivered a strong improvement in gross margins at the same time as investing in the business to position us for future growth opportunities."

During the period revenue rose 2.8 per cent to $538 million. The company continued its store optimisation program, opening 61 new sites and closing 32 underperforming stores. As at June 30 2008, store numbers rose to 813 - a net 29 new stores for the year.

Perlstein confirmed the company had completed the first phase of a business overhaul, dubbed Project Revitalise, which would in future see investment in new IT systems covering a broad range of functions from inventory management to marketing. Stores would also be revitalised, while the company would continue to focus on sourcing from Asia to boost margins.

"We are already seeing the benefits from repositioning our brands, and we are also seeing some early wins by way of productivity benefits from the initial introduction of our new IT system," Perlstein said.