Fashion retailer Country Road has become the latest victim of a difficult trading environment, suffering a 10.9 per cent dip in Australasian sales for the 2011 financial year.
The 10.9 per cent decrease in Australasian sales relates to comparable stores, and the figure drops down slightly to two per cent when accounting for the 10 new shops opened in the region during the past year to June 30, 2011. The new additions include seven Trenery stores and the group also added two concession stores to its retail network in South Africa, as well as an online store in August 2010.
Despite the drop in Australiasian sales, Country Road group sales overall were up 10.6 per cent on last year, contributing to a total sales figure of $411.7 million for FY2011, compared to $372.1 milion for FY2010.
However, Country Road chief executive Howard Goldberg admitted sales had been affected by the rocky retail landscape in Australia, and said the group's South African stores had helped buoy overall results.
“Country Road has performed well to deliver these profit results in an increasingly tough Australian retail environment,” he said.
“In anticipation of these challenges, Country Road has continued to implement significant cost saving initiatives and enforce strict inventory control and cash management. In addition, the restructure of the South African business and the expansion of our online store has assisted us in improving our bottom line.”
Goldberg also said the retail outlook remains challenging, but while the group's expectations on sales remain conservative, he now expects profit before tax to increase by between 30 per cent and 40 per cent on the prior year.
“Country Road will continue its disciplined approach and focus on what it does best, creating and delivering uniquely fashionable quality products at great value while improving shareholder returns,” he said.
Audited financial results are currently scheduled to be released August 25, 2011.