"I wish I were here saying that there had been a miraculous bounce back in consumer confidence."
Pacific Brands Chairman Peter Bush and CEO David Bertolussi have addressed shareholders at the the company's annual general meeting.
Here are the four signs the company has a long way to go before profitability.
1. The leadership is not hiding from its responsibilities.
“I wish I were here saying that there had been a miraculous bounce back in consumer confidence and that retail was roaring once again,” Bush said. "Unfortunately, it simply isn’t. And while we have been taking all practical steps to engineer better performance from your business, we still have some way to go.”
2. The company is selling off brands.
Pacific Brands will focus on its core Bonds and Sheridan businesses, announcing it will sell its workwear division which includes Hard Yakka, KingGee and Stubbies for $180 million. Pacific Brands has vowed to continue reviewing its business, with the aim of further simplifying operations.
3. There are currency woes.
Bertolussi said trade and currency market conditions continued to be difficult. Pacific Brands, which sources 87 per cent of products from overseas, could not quickly increase domestic production to take advantage of recent fall in the Australian dollar.
4. Finally, the numbers do the talking.
Pacific Brands suffered a loss of $224 million in the 2013/14 financial year. Sales in the current financial year are so far higher than last year, however, due to growth in direct sales to consumers and online. Bertolussi said competition and the fall in value of the Australian dollar would still pull back profit margins. Earnings before interest and tax were expected to be lower than a year ago, but higher than in the second half of the 2013/14 year.
