New Zealand apparel group Hallenstein Glasson has revealed that local competition may be to blame for an expected drop in the retailer's annual profit this year.
The retail company, responsible for women's clothing brands Glassons and Storm, has confirmed it expects its full year figures could drop by as much as 12 per cent due to a slow winter season and tough competition in the Australian market.
Net profit after tax, for the 12 months ending August 1, is now expected to be in the range of NZ$18.5 million to NZ$19.5 million.
While the company's Storm chain has continued to trade to expectations, the Glassons brand has experienced difficulties of late.
Chief executive Graeme Popplewell said the retailer saw a late start to winter sales, which were down 1.6 per cent in the three months to May, and contributed to the lacklustre forecast.
"A late start to winter has meant earnings for the current winter season will not match last year," he said.
"Whilst menswear business Hallenstein Brothers had continued to benefit from its repositioning in the market and from innovative marketing, Glassons has found itself operating in an environment characterised by aggressive discounting and price based promotion."
Popplewell added that, competition in Australia in particular during the winter period, from larger rivals in “volume fashion womenswear”, had added to the retailer's plight.
"There is now considerable pressure on margin for the balance of the winter season," he said.