Womenswear retailer Noni B has flagged drastic changes ahead, following a financial hit.
The company confirmed today that it is presently discussing “strategic alternatives with respect to the company's capital structure” with the Kindl family (the company's significant shareholders).
The Kindl family, which includes Noni B managing director David Kindl, currently owns around 38 per cent of the company's issued shares.
Noni B also confirmed that the board has also commenced a management restructure in order to return the company to profit.
The announcement follows a gloomy market update from the retailer, which has reported that it expects an impairment charge to intangible assets in the current year.
The write down of approximately $5.5 million, subject to audit, represents the carrying value of the remaining intangibles on the balance sheet. This impairment charge is a one-off, non-cash item.
As advised in April 2014, sales on a comparable store basis for the three months to the end of March 2014 were 14 per cent below the previous corresponding period.
Commenting, Noni B said the results reflected “consumer expectations of substantial discounts when buying clothes, which the company has tried to resist in order to maintain the higher margins achieved in the first half”.
While new promotions were implemented in the fourth quarter to stimulate demand, the company said April and May sales were also impacted by the unseasonably warm weather leading in to the winter season and reduced spending by Noni B's core customers following the federal budget.
Sales for the 11 months to the end of May 2014 were 7.8 per cent lower on a comparative store basis than the previous cor responding period.
As a result of lower sales, Noni B added that it anticipates a full year after tax loss, before impairment, of between $1.8 -$2.2 million, subject to June trading conditions and any final full year audit adjustments. This follows a profit after tax in the first half of $1.9 million.
Noni B Limited, founded in 1977, incorporates the Noni B and Liz Jordan designer collections and currently operates 212 stores nationally and online at www.nonib.com.au.