New Zealand apparel group Hallenstein Glasson has revealed a drop in sales, as it suffers the consequences of a “particularly challenging” period.
While the group recently flagged an extensive retail rollout for its Storm brand across Australia [Ragtrader, November 2013], conditions on home ground are not as rosy.
Directors have advised that sales for the first 14 weeks of the financial year commencing August 1, 2013 have remained subdued, with group sales -7 per cent on the prior year.
“Although the major trading months of the first half of the year are still ahead of us, given the slow start to the season it is unlikely that results for the half year ending February 1, 2014 will match those of the prior year.”
Based on current trends, the company reported that net profit after tax for the six months ending February 1, 2014 are expected to be approximately $8 million – representing a decrease of -20 per cent on the prior period ($10.371 million.)
Fellow New Zealand-based retailer Postie Plus Group also recently alluded to a difficult period for the company, issuing a frank disclosure on the status of its business.
As previously reported on ragtrader.com.au, the group confirmed a significant net loss for 2013, has lost Hamish Stevens as a director at PPGL, after just two months in the role.
According to the figures, PPGL sales revenue was $84.24 million, a decrease of 10.5 per cent on the prior year’s result of $94.08 million. The traditionally stronger second half incurred sales of $40.95 million, compared with the reported revenue of $43.29 million in the first half.
New Zealand-based retailers The Warehouse Group and Michael Hill, however, have fared slightly better.
The board of The Warehouse Group reported last week that group sales for the first quarter ending October 27 of $569.8 million, boasting solid sales performances from each of its retail brands.
The Warehouse (Red Sheds) reported sales for the first quarter of $354.5 million, an increase of 8.8 per cent or $28.8 million compared to the same quarter last year. Same store sales increased 5.5 per cent in the quarter with the ‘Red Sheds’ now recording 11 consecutive quarters of positive same store sales.
The company said major drivers of sales growth in the first quarter have been the continuing improvement in performance from Auckland stores (with 12 Auckland stores now refitted) and double digit sales growth in our apparel, housewares, health & beauty, gaming, jewellery, consumer electronics, appliances and whiteware categories.
This sales growth has not yet translated into gross profit growth, however, with the group citing “margin pressure due to category mix and a number of different factors in general merchandise categories”.
By comparison, jewellery empire Michael Hill has continued to shine, but is still experiencing problems on home soil.
Overall, the group achieved solid growth for the quarter, finishing 3.8 per cent up on last year for the same stores.
Australia traded slightly up on the same quarter last year, with Canada and the US also continuing to show “good growth on a same store basis”.
The group reported, however, that “New Zealand stores were unable to maintain the momentum shown in prior quarters and ended the period 6.2 per cent down on the prior period”.