Of the three apparel brands within Hallenstein Glasson's portfolio, it was womenswear brand Glassons that struggled the most in the first half of 2010/11.
The Auckland-headquartered company revealed its net profit after tax for the period to February 1, 2011 was $7.136 million. This was down 16.5 per cent from $8.548 million in the first half of 2009/10.
Group sales dropped by 1.7 per cent to $100.612 million, but it was womenswear brand Glassons that suffered the most with its sales down 6.1 per cent in the New Zealand market and down 5.6 per cent within Australia.
Hallenstein Glasson chairman of directors Warren Bell said Glassons sales had been weaker than expected in the key Christmas trading period.
“The sales results achieved during this period are critical to achieving our profit and this year we struggled to achieve our targets. Competition was particularly intense in women's apparel and we had to meet the market to ensure our inventory levels remained under control. At the end of the summer season our inventories were $14.247 million, compared with $13.572 million last year,” Bell said.
He added the good news was that menswear brand Hallensteins and emerging womenswear chain Storm had “traded well” over Christmas. Hallensteins sales were up 3.7 per cent, supported by branding and advertising agency changes.
Storm sales lifted 4.7 per cent on a like-for-like basis and net profit lifted 31.8 per cent.
Looking ahead, Hallenstein Glasson flagged a number of factors that may impact the business in the second half of 2010/11.
“The volatility in cotton prices has meant that in order to secure fixed contracts on future orders we have had to pay suppliers earlier than in the past,” the company reported.
Hallenstein Glasson also has seven stores that are yet to reopen after the impact of the Christchurch earthquake on February 22, 2011.
Hallenstein Glasson reported the general economic environment was still “challenging” but an upswing in business in the Glassons portfolio had been evident in Australia since January.
“We have a business with a clean balance sheet, highly experienced management and the strength to compete in what we see will be a very demanding market over the balance of the year,” the company said.
Hallenstein Glasson operates a total of over 110 stores with 25 of these within Australia.