Fashion empire OrotonGroup remains “vigilant” as it braces for a year of transition ahead, despite a lift in profit for the 2013 financial year.
The company, responsible for luxury accessories brand Oroton, achieved a 0.8 per cent rise in group revenue to $186 million for the period for the year to July 2013, compared to last year's $184.7 million.
Net profit after tax also rose, to $27.5 million, representing a 10.8 per cent lift on the previous year, with like-for-like sales growth also up by one per cent.
However, despite the slight rise, OrotonGroup CEO Mark Newman said the group remains “vigilant “ of its cost base, and “prepared to make reductions”, as it prepares for the final blow following the exit of the Ralph Lauren licence on June 30, 2013.
Fiscal year 2013 results for the company included a $5.2 million “earnings effect” of exiting its long-running partnership with high-end brand Ralph Lauren earlier this year.
Newman added that OrotonGroup – which currently operates 68 Oroton stores internationally – will also review marginal stores at lease expiry. The group closed three stores over the last 12 months following lease expiry.
Going forward, OrotonGroup will also be closely monitoring the development of its new Brooks Brothers joint venture in Australia.
The group has described the brand as “an internationally renowned men’s and women’s heritage brand established in 1818 with strong repeat business and exciting potential in the Australia/New Zealand market”.
“We expect FY14 to be a further year of transition for the group as we invest to grow our Oroton brand both here and abroad and launch our Brooks Brothers joint venture in Australia, with the first stores to open in February 2014 and up to eight in total to open by financial year end,” Newman said.
“We will also continue to review other possible strategic options including further partnerships, licence agreements and/or acquisitions.”
Newman added that fiscal year 2014 earnings expectations will depend on the timing and size of potential new brand opportunities, and in the event that there are no completed deals that have a material effect in the first year and assuming a continued challenging and discounted marketplace, OrotonGroup earnings before interest and tax would be between $16 million and $18 million.
Its earnings guidance now includes 100 per cent of overhead costs, previously shared 50-50 with Ralph Lauren.